Armed forces of this country –be it Army, Navy, Air Force or CRPF or BSF and others are doing great service in the most difficult circumstances. As a mark of respect to them, this blog publishes article on tax issues and completely free to read. I have already published two of the related posts – disability pension to armed forces and Pensions received by certain awardee. However, the kind of feedback, it is considered necessary to post a consolidated post on the subject of tax free pensions to Armed Forces Personnel.
Armed Forces personnel get the disability pension, which is aggregate of two components-disability pensions and service pension. On the question of its being tax free, the first thing to note is the fact that the tax exemption on the disability pension is not provided under section 10 or anywhere in the Income Tax Act. The disability pension has been made tax-free by executive instructions of the government.
You can read on this issue on the post titled No Tax or TDS on Disability Pension to Armed Forces
The pension received by gallantry award holder and also family pension received by the member of the family of gallantry winner’s is tax free as per section 10(18) of the Income Tax Act . , Read the provision below :
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 notification77 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);
Section 10(18) l Gallantry Award 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.|
|Sl. No.||Name of gallantry award||Circumstances for eligibility|
|1||Ashok Chakra||When awarded for gallantry.|
|2||Kirti Chakra||– do –|
|Shaurya Chakra||– do –|
|Sarvottam Jeevan Raksha Padak||When awarded to civilians for bravery displayed by them in life saving acts.|
|5||Uttam Jeevan Raksha Medal||– do –|
|Jeevan Raksha Padak||– do –|
|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 –|
|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 –|
|Vayu Sena Medal||– do –|
|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 –|
|President’s Fire Services Medal for Gallantry||– do –|
|President’s Home Guards and Civil Defence Medal for Gallantry||– do –|
|Home Guards and Civil Defence Medal for Gallantry||– do –|
What is the Meaning of Family For Exemption Purpose
The meaning of family members is Explained under Section 10(5) of the Income Tax Act .
(i) the spouse and children of the individual ; and
(ii) (ii)the parents, brothers and sisters of the individual or any of them, wholly or mainly dependent on the individual
Section 10(19) of the Income Tax Act provides that amount of pension received by the family members of armed forces personnel including Para-,military personnel who dies in certain circumstances in course of performing his /her duties , shall be tax free . The excerpt of the provision is given below :
(19) family pension received by the widow or children or nominated heirs, as the case may be, of a member of the armed forces (including paramilitary forces) of the Union, where the death of such member has occurred in the course of operational duties, in such circumstances and subject to such conditions, as may be prescribed
What are Condition Prescribed ?
Section 10(19) speaks of exemption of family pension when the death of Armed Forces or Para-Military personnel – has occurred in the course of operational duties in certain Circumstance which is prescribed in Rule 2 BBA
(i) acts of violence or kidnapping or attacks by terrorists or anti-social elements;
(ii) action against extremists or anti-social elements;
(iii) enemy action in international war;
(iv) action during deployment with a peace keeping mission abroad;
(v) border skirmishes;
(vi) laying or clearance of mines including enemy mines as also mine sweeping operations;
(vii) explosions of mines while laying operationally oriented mine-fields or lifting or negotiation minefields laid by the enemy or own forces in operational areas near international borders or the line of control;
(viii) in the aid of civil power in dealing with natural calamities and rescue operations;
(ix) in the aid of civil power in quelling agitation or riots or revolts by
What Precaution Must Be taken for Exemption Deceased Family ?
As per Rule 2BBA (2), obtain a certificate from the Head of the Department where the deceased member of the armed forces(including paramilitary forces) last served, or the service headquarters, as the case may be, that the death of such member has occurred in the course of operational duties in circumstances mentioned above .