BOTH SERVICE ELEMENT & DISABILITY ELEMENT ARE EXEMPTED FROM IT

Instruction No 2/ 2001

F.No. 200/51/99-ITA.I

Govt of India Ministry of Finance

Deptt of Revenue

Central Board of Direct Taxes

New Delhi, the 2ndJuly, 2001

To: All Chief Commissioners of Income-Tax

       All 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 in spite of Board’s Instruction No 136 dated 14thJanuary 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)

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