Instruction No 136

F.No. 34/3/68-IT(AI)Govt of India

Central Board of Direct TaxesNew Delhi, dated the 14th Jan 1970

From :Shri S N NautialSecretary, CBDT

To:All Commissioners of Income Tax

Subject : Exemption – Service and Disability Element of Disability Pension granted to a disabled officer of the Indian Army – whether exempted from Income Tax.

Reference is invited to the Board’s Letter F No 42/9/59-IT(AI), dated the 5 th Sept 1960 on the above subject wherein it was mentioned that in the cases falling under Item (29) of Finance Deptt Notification No 878-F (Income Tax) dated 21-3-1922, the ‘disability element’ of the disability pension received by an officer of the Army will only be exempted from tax and that the ‘service element’ will be subjected to tax.

2. On reconsideration of the matter, in consultation with the Ministry of Law, the board are advised that item 29 of the notification does not differentiate between types of pensions. Accordingly in the cases falling under item 29 of the above notification, entire disability pension will be exempted from income-tax.

3. The above instructions may be brought to the notice of all assessing officers in your charge.

Yours faithfully, Sd/-(S N Nautial)Secretary CBDT

Instruction No 2/ 2001

F.No. 200/51/99-ITA.IGovt of India

Ministry of FinanceDeptt of Revenue

Central Board of Direct TaxesNew Delhi, the 2nd July, 2001

To :All Chief Commissioners of Income-TaxAll Directors General of Income-Tax

Subject : Exemption from Income Tax to disability pension, i.e., “disability element” and “service element” of a disabled officer of the Indian Armed Forces – Instructions regarding

Sir,

References have been received in the Board regarding exemption from Income Tax to disability pension, i.e., “disability element” and “service element” of a disabled officer of the Indian Armed Forces.

2. It appears that field formations in certain cases are not uniformly allowing disability pension inspite of Board’s Instruction No 136 dated 14th January 1970 (F No 34/3/68-II(AI) ).

3. The matter has been re-examined in the Board and it has been decided to reiterate that the entire disability pension, i.e, disability element and service element of a disabled officer of the Indian Armed Forces continues to be exempt from Income Tax.

4. This may be brought to the notice of all officers working under you.

Yours faithfully Sd/-(B L Sahu)OSD (ITA-I)