New Delhi: The disability pension of military personnel should be taxed, except those who suffer damage during battle, the Army headquarters has proposed, ThePrint has learnt.
The finance ministry had recently decided to tax disability pension, leading to a massive outcry from military veterans. Defence Minister Rajnath Singh had promised to look into the issue, and the three service chiefs were asked for their views. This is why the Army has now sent this fresh proposal to the Navy and the Air Force.
As of now, both the service and disability elements of the pension are tax free for all disability pensioners.
Other new proposals
The Army headquarters is also learnt to have proposed that the premium on the Ex-servicemen Contributory Health Scheme (ECHS) scheme should be calculated on the percentage of a soldier’s disability.
The proposal also seeks to minimise the distinction between ‘field’ and ‘peace’ postings of personnel while calculating the disability pension, and less disparity in the disability pension between officers and personnel below officer rank (PBOR).
The proposal from the Army headquarters comes days after it made a presentation to the other service chiefs on 31 July.
The presentation included some radical changes in the disability pension structure, such as increasing the minimum eligible disability for a person to 30 per cent from the current 20 per cent, and doing away with the factor of broadbanding of disability and giving only the only the actual disability percentage.
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Broadbanding refers to the fact that soldiers with 20 per cent to 50 per cent disability get 50 per cent of the last drawn salary, those with 51 per cent to 75 per cent disability get 75 per cent, and those from 75 per cent to 100 per cent disability get 100 per cent.
Air Force and Navy weren’t in favour
Highly-placed sources in the government told ThePrint that the other two service chiefs were not in agreement with the points put forth by the Army in its presentation.
“The Air Force and the Navy are keen on keeping the disability pension structure the way it is at present,” a source in the defence establishment said.
However, it remains to be seen how they react to the Army’s latest proposal.
Why is it a big issue?
The defence ministry had asked all three service chiefs to give their views on the issue after a finance ministry circular declared that these pensions would be taxed, causing major outrage within the armed forces and particularly among veterans. The Army had agreed with the proposal, saying unscrupulous officers had gamed the system to their own benefit.
There were demands for the withdrawal of the circular, fuelled by the fact that several soldiers of all ranks have continued to serve with dignity and reach higher ranks, despite severe disability.
A prominent face of this demand was Ian Cardozo, who cut off his injured leg with his own khukri during the 1971 war as a young Major, and continued to serve until retiring as a Major General.
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