Gallantry Awards: What Are The Tax Benefits ?

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Gallantry Awards: What Are The Tax Benefits ?

gallantry awardAwards instituted by central government or state government or instituted by any other body in public interest or notified for this purpose are tax free under section 10(17) of the Income tax Act. A reader Abhishek Singh, Delhi has asked "I am an army officer who has been awarded Sena Medal for Gallantry. I am in active service, what kind of tax benefits/exemptions do I get. Please tell me the authority, act etc which I can quote to the relevant authorities. "

Sena Medal is  an Indian Military decoration which is awarded to members of the army, of all ranks, "for such individual acts of exceptional devotion to duty or courage as have special significance for the Army." However,Sena Medal(Distinguished) is given for distinguished service carried out by any soldier,not in the face of enemy. 

From 1 February 1999, the central government set a monthly stipend of Rs. 250 for recipients of the award when it is awarded for bravery. It has since been revised to Rs. 500.

What are tax benefits to Sena Medal Awardee ?

Sub-section 10(17A) and sub-section 10(18) provides benefits of tax exemption of payments received either in cash or in kind or pension or family pension . The said provisions are as under 

10. In computing the total income of a previous year of any person, any income falling within any of the following clauses shall not be included

......................

 (17A) any payment made, whether in cash or in kind,

(i) in pursuance of any award instituted in the public interest by the Central Government or any State Government or instituted by any other body and approved by the Central Government in this behalf; or

(ii) as a reward by the Central Government or any State Government for such purposes as may be approved by the Central Government in this behalf in the public interest;

Similarly , subsection 18 is regarding exemption of pension or family pension . The said provision is is under :

10(18) any income by way of

(i) pension received by an individual who has been in the service of the Central Government or State Government and has been awarded Param Vir Chakra or Maha Vir Chakra or Vir Chakra or such other gallantry award as the Central Government may, by notification in the Official Gazette, specify in this behalf;

(ii) family pension received by any member of the family of an individual referred to in sub-clause (i).

Explanation.For the purposes of this clause, the expression family shall have the meaning assigned to it in the Explanation to clause (5);

What are the Awards notified for purpose of exemption under  the I.T. Act?

The awards which are exempt from tax are those whcih have been notified by the Government specifically to be exempt u/s 10(18) . CBDT issued notification     No. SO 1048(E), dated 24-11-2000, as amended by Notification No. SO 81(E), dated 29-1-2001   

119. Income by way of pension received by an individual who has been in service of Central Government or State Government and has been awarded any gallantry award

In exercise of the powers conferred by sub-clause (i) of clause (18) of section 10 of the Income-tax Act, 1961 (43 of 1961), the Central Government hereby specifies the gallantry awards for the purposes of the said section, mentioned in column 2 of the table below awarded in the circumstances as mentioned in corresponding column 3 thereof.

Table

Sl. No.

Name of gallantry award

Circumstances for eligibility

(1)

(2)

(3)

1.

Ashok Chakra

When awarded for gallantry.

2.

Kirti Chakra

- do -

3.

Shaurya Chakra

- do -

4.

Sarvottam Jeevan Raksha Padak

When awarded to civilians for bravery displayed by them in life saving acts.

5.

Uttam Jeevan Raksha Medal

- do -

6.

Jeevan Raksha Padak

- do -

7.

President’s Police Medal for Gallantry

When awarded for acts of exceptional courage displayed by members of police forces, Central police or security forces and certified to this effect by the head of the department concerned.

8.

Police Medal for Gallantry

- do -

9.

Sena Medal

When awarded for acts of courage or conspicuous gallantry and supported by certificate issued to this effect by relevant service headquarters.

10.

Nao Sena Medal

- do -

11.

Vayu Sena Medal

- do -

12.

Fire Services Medal for Gallantry

When awarded for acts of courage or conspicuous gallantry and supported by certificate issued to this effect by the last Head of Department.

13.

President’s Police and Fire Services Medal for Gallantry

- do -

14.

President’s Fire Services Medal for Gallantry

- do -

15.

President’s Home Guards and Civil Defence Medal for Gallantry

- do -

16.

Home Guards and Civil Defence Medal for Gallantry

- do –

Conclusion on Tax Benefits on Awards

Only gallantry award winners are given benefit of taxation of pension or family pension u/s 10(18) of the I T Act. Therefore, those individuals who are receiving Sena Medal for distinguish service are not eligible for taxation benefits.
Only notified awards as given vide Notification by government (given above) will get the benefit u/s 10(18) . Although , the said notification is not for section 10(17A) , I feel that the stipend received by the awardee of Sena Medal or other notified  awards as above , shall get exemption u/s  10(17A) of the I T Act .It should be noted that not all awards given by Government of India is made tax free .

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The author has spent twenty years with Income Tax department and desire to service common citizen of India which include professionals like tax practioners ,CA,ICMA, CS and tax lawyers by advising them on the direct tax matters for a very affordable fee.
5 Responses
  • http://google bipin pal

    .thanks for details , however please confirm if the exemption for gallantry award winners is on the entire income or pay received from the CDA[O] or only on monetary award received eg rupees 500 pm in case of sena medal for bravery

  • http://yahoo/google R P JAIRATH

    Please cofirm if the exemption for Gallantry award winner is on the entire income/pay received from the Govt or only the monetary allowance received Rs 500/- inthe case of a Sena Medal (Gallantry). Section 10(17 A)refers

    OR Only Pension received on retirement is exempted from incometax (Section 10(18) refers

  • Wg. Cdr. Ranbir Singh

    Rs. 500 pm for a Vayu Sena Medal (G) is ridiculous in the present times.
    Actually it is funny !!
    Ranbir

  • GURUPRASANNAN

    Sir,

    Please quote the Monetary benefits of Gallantry Award for Firemen 2014 President Award

    • http://taxworry.com Prashant Thakur

      Answer to your question is as under :
      TO BE PUBLISHED IN PART I SECTION I, SECTION–I OF THE GAZETTE OF INDIA DATED SATURDAY THE 1ST AUGUST, 2009 PRESIDENT’S SECRETARIAT NOTIFICATION
      New Delhi, the 15th July, 2009 No. 91- Pres/2009

      The President is pleased to direct that the following amendments shall be made in the rules governing the award of the President’s Fire Service Medal and Fire Service Medal published in Part –I, Section 1 of the Gazette of India of 31st May, 1975 vide Notification No. 41–Pres/75 dated the 19th May, 1975, with immediate effect :
      -PRESIDENT’S FIRE SERVICE MEDAL FOR GALLANTRY
      For the existing sub-
      rule (a) of Rule (5), substitute the following:

      “ All the recipients of this gallantry award shall be entitled to monetary allowance at uniform rates, irrespective of their ranks. The rate of
      monetary allowance for the Medal as also for the Bar to the Medal shall be Rs. 1500/- (Rs. one thousand five hundred) per mensem”.

      I do not know if there is any other changes after 2009.