India Legal – July 13, 2019

| INDIA LEGAL |July 22, 2019 41

sion of armed forces personnel—a con-
cession that was introduced by the Bri -
tish in 1922—as it was being misused.
The CBDT noted that “tax exemption
will be available only to personnel who
have been invalidated from service on
account of bodily disability attributable
or aggravated by service and not to per-
sonnel who have been retired on super-
annuation or otherwise”. This resulted
in an uproar in the ranks of veterans,
especially those who were battle casual-
ties in war and operations less than war.
On June 25, the Army headquarters
put out a note which stated that unscru -

pulous persons were exploiting the exis -

ting system for seeking financial gains

from their disabilities. Disability is gran -

ted to personnel who are disabled in

com bat or during peace with disability

attributable to service conditions. It no -

ted that higher compensation awarded

to disability with tax exemption had led

to a rise in personnel seeking disability

for lifestyle diseases. The note also

mentioned the anomaly that the gen-

uinely disabled who deserve all the

remuneration and unscrupulous person-

nel have gained from disability benefits.

The army note is not a replica of the

CBDT circular.

For a full one week thereafter, a free-

for-all debate raged in print, TV and

social media condemning the govern-

ment’s decision for a rule change in the

award of disability pension and tax

exemption. On July 2, Finance Minister

Nirmala Sitharaman put the onus for

the withdrawal of benefit on the Army.

In a message on Twitter, her office put

out an unsigned note, calling it “Res -

pon se of armed forces on issue of taxa-

bility of disability pension” and posted

the Army note with it. For a former

defence minister to take such a bland

view of a sensitive issue is surprising.

D

isability benefits come in two

categories—war injury pension

attributed to operational serv-

ice, and normal disability pension due

to hazards of service in cluding lifestyle

diseases, that is, stress and strain of

service duty. It is over this part that the

Army note expresses concern where a

large number of service personnel for

pecuniary gain were using medical dis-

ability and reducing the numbers of

fully-fit personnel available for war. A

study carried out by the Director Gen -

eral Armed Forces Medical Services had

found that before 2006, very few senior

officers claimed disability pension but

by 2015, almost 20 percent were draw-

ing disability benefits. Ironically, med-

ical officers who determined the status

and degree of disability are themselves

the biggest beneficiaries of this award.

Disability pension can be 20 to 50 per-

cent more for the same rank plus tax

exemption.

The claims for disability pension be -

gan increasing after the Sixth Pay Com -

mission in 2006 when disability benefits

were enhanced. There are nearly 25 lakh

veterans on the pension rolls, with as

DISTINGUISHED SERVICE
(Left) Maj-Gen Ian Cardozo receiving a military
award from President Giani Zail Singh. He had
amputated his foot using a khukriduring the
1971 war; (top) There were combat casualties
during several wars, including Kargil
NewzHook/YouTube;

Pramod Pushkarna