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Army HQ backs tax on disability pension, says unscrupulous officers have gamed the system

The letter, tweeted by Nirmala Sitharaman’s office, supports govt’s move to tax disability pension of military personnel who retired after full service.

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New Delhi: The Army Headquarters has defended the Narendra Modi government’s move to tax the disability pension given to military personnel, saying that over the years, “unscrupulous” officers have found “leverages in the system” for seeking financial gains through their disabilities.

The letter, tweeted by the office of Finance Minister Nirmala Sitharaman, has divided the military fraternity, both serving and retired, with many questioning the logic of the move.

Sitharaman’s office has removed the heading of the letter and also the signature details. However, the letter talks only of the Army, indicating that it originated from Army Headquarters, something that Army sources confirmed to ThePrint.

All letters to the government that state the Army’s position on a matter are sent out after getting clearance from the Army chief.

Also read: Indian Army chief should know that no one feigns disability

What the letter states

The letter, which Sitharaman’s office called “Response of the Armed Forces on the issue of taxability of disability pension”, began by talking about the case of Maj. Gen. Ian Cardozo (retd), which was highlighted by the veterans against the recent directive.

A legendary hero of the 1971 war, Maj. Gen. Cardozo had stepped on a landmine and used his own khukri to amputate his leg and fight on. But the letter, while heaping praise on Cardozo, went on accuse Army personnel of “gaming the system”.

“Unfortunately some veterans feel the courage and valour displayed by the soldiers wounded in the battle should be compensated for their courage by mere financial remuneration… (This) aspect is being exploited by those unscrupulous personnel who have gained from disability benefit provided by the government to the disabled soldiers,” the letter stated.

“The Army is concerned about all personnel who because of their disability are boarded out of service and therefore need additional financial support. Any soldier with disabilities that are due to combat conditions or otherwise need to be cared for, irrespective of the situation in which they have been physically disabled. There should be NO segregation amongst genuinely disabled personnel.

“At the same time, those who have found the leverages in the existing system for seeking financial gains through disabilities need to be scrutinised and taken to task, where ever necessitated.”

Mincing no words, the letter said the “broad banding and compensation awarded for disability with tax exemption over the years” led to a rise in personnel seeking disability even for lifestyle-related diseases.

“The trend, if not checked at this stage, is a cause of worry as Army cannot have large number of personnel with medical disabilities in the rank and file, when the security challenge to the nation are on the rise,” the letter stated.

However, a senior serving officer who refused to be identified, questioned the letter.

“If there are cases where the system has been gamed, the Army Headquarters should take action against its own boards, officers and doctors who help in misusing the system. Why should genuine cases of disabilities be punished? And how does taxing prevent misuse?”

The current scheme 

Under the current pension scheme, a colonel-rank officer retiring after full service would get a pension of about Rs 1,02,000 per month. If the officer is disabled during service, he is graded in a percentage system by the medical board.

“The rule for civilians as well as uniformed personnel is the same when it comes to disability pension: For 100 per cent disability, 30 per cent of pay becomes the disability pension. It is proportionately reduced for lesser percentage of disability,” a former officer explained.

There have been cases in the past when officers are alleged to have misused the scheme to avail disability pension at the time of retirement. The most famous is a former Army chief getting a disability certificate for low hearing just days before his retirement.

Earlier this month, in a first of its kind case, a retired Major General was found guilty of falsifying medical records to earn disability pension, and was sentenced to a loss of 10 years’ service for pension.

Also read: IPS officer to take up post at Indian Army HQ to deal with human rights issues


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  1. Punish the culprits by withdrawing their disability pensions irrespective of their ranks. Why punish the genuine cases?

  2. There are known cases of misuse of #ECHS #CGHS #CSD let’s close all of them. There is corruption in every government department. Let’s close them.

  3. The Army officer who wrote (or was made to write) a letter for withdrawal of IT rebate provided to soldiers with disAbility should be punished for granting Disability status to non entitled personnel and scumbling to pressure from Senior Officers.

    There is no need to punish the whole lot of genuine cases. It is a big relief to very miniscule number of disabled pensioners. Can Govt give data as to how much they would get if disabled soldier’s pension is taxed vis-a-vis tax on politician’s pay and pension?

  4. I think just because of few officers out of entire 3 percent of force, taxing entire ORs, JCOs and genuine cases incl officers is not a bright idea…why can’t you consider taxing the politicians who enjoy tax free salaries and pensions even after serving mere 5 years with no risk involved…..let’s not compare any perks and privileges of any of the forces… some wise thoughts would have gone into granting these perks and privileges…let’s not finger around citing few cases….Jai Jawan Jai Kisan and The nation will thrive all odds

  5. Why punish the whole lot of genuine cases who wanted to be boarded out on detection of disability during service but were retained in service interest.
    Punish who indulged in malpractice and streamline system to check such practice.

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