Persons in receipt of disability pension are entitled to Income Tax exemption on entire pension

This blogger has received many queries on the question of Income Tax exemption on disability pension. The most frequently asked question is whether this IT exemption is applicable on just the ‘disability element’ of pension or the entire pension.

Most do not know that ‘disability pension’ consists of two elements – Service Element (also known as Service Pension) & Disability Element. Service Element is granted in accordance with the length of service rendered but subject to a minimum amount. Hence when a person has completed pensionable service (15 years for PBOR and 20 for Commissioned Officers), his / her service pension is his / her service element. Even if a person has not rendered pensionable service, he / she is entitled to ‘service element’. To take an example, in a case where a PBOR has been invalided after just one day of service, he is still entitled to ‘service element’ which would be atleast granted @ Rs 1913 per month at 5th CPC rates (plus applicable DA of course). The other element of disability pension is ‘disability element’ which is granted in accordance with the percentage of disability suffered. No disability element is granted to individuals having a disability below 20% however such individuals are still entitled to receive the service element.

The Ministry of Finance has confirmed that Income Tax exemption is available on both elements, i.e., disability as well as service elements of disability pension. Hence the entire disability pension (service pension / element as well as disability element) continues to remain non-taxable.

A copy of the clarification by the Ministry of Finance is available here

Creativity, a whiff of fresh air ! MoD Vs DoPT : Aye for the forces, Nay for the agencies !

Just the opposite of the life time gag on spies is expected to be implemented for Defence Officers. In a welcome decision, the Ministry of Defence has in principle agreed to do away with permission required to publish material by defence officers in public domain in their personal capacities. Officers may soon be free to express their views in articles and books without seeking prior permission while doing so in personal capacity. Rules permitting the same may be incorporated in the times to come. Contrary to popular perception however, the Armed Forces have not been very stingy even earlier in granting permissions for creative activities by serving defence personnel. Further contrary to what is usually perceived, even serving Army officers, in a limited manner, can indulge in creative activities for commercial gain with prior sanction of the Central Govt.

Now compare this with the blanket gag on former employees of civil intelligence agencies issued by the Department of Personnel & Training (DoPT) who would now risk having their pensions at stake in case they publish information which may “prejudicially affect the sovereignty and integrity of India, the security, strategic, scientific, or economic interests of the state, or relations with a foreign state or which would lead to incitement of an offence”. This blogger (personally) does not entirely disagree with the power of the govt to impose a gag in public interest but there must be a good system of checks and balances in place and it should not be left to superior govt officers to decide the already ambiguous terms such as sovereignty and integrity in such a context. Offences and misdemeanours of this kind have to be strictly defined under the system in the rule book so as to prevent misuse by the overzealous.

What is in store for employees of intelligence agencies : With thanks to ‘The Telegraph’

What is in store for employees of the defence services : With thanks to ‘NDTV’

News you can use : Broad recommendations of the Amomalies Panel

http://www.tribuneindia.com/2008/20080627/main4.htm

Cols, Brigs to be moved into higher pay band

Vijay Mohan

Tribune News Service

Chandigarh, June 26

Officers of the rank of brigadier and equivalent in the armed forces are now expected be placed in the pay scale recommended for major generals. Similarly, colonels and equivalent would be moved up in the pay-scale ladder after they compete a certain length of service.
Sources associated with the empowered committee of secretaries looking into perceived anomalies in the Sixth Pay Commission’s recommendations said that the upward revision in pay scales for brigadiers and colonels had been agreed to during deliberations between the committee members and defence ministry representatives. A final decision in this regard, however, is yet to be taken and there could be some modifications.
The committee is headed by the cabinet secretary, K M Chandrasekhar. The committee was set up after there was widespread discontent in the armed forces, Indian Police Service, para-military organisations as well as other central government services over the pay panel’s recommendations. The committee’s recommendations would be sent to the cabinet for its approval.
Sources said that it was now proposed that brigadiers would be moved into the pay scale of 39,200-67,100, which had been recommended by the pay panel for major generals. Colonels and equivalents would also be moved into a higher scale after they put in at least 20 years of service.
Sources added that no changes in the basic pay of officers of other ranks were expected, though revision of certain allowances and benefits is on the cards. Middle-rung officers were said to be the worst hit by the pay panel’s proposals.
Also on the cards is an upward revision of the grade pay for armed forces officers from captain to brigadier. While fixing grade pay, armed forces officers were recommended a grade pay that was one level below that of civil service officers for the same basic pay. For example, the same pay scale was recommended for a captain in the army and a senior time scale officer in the civil services. The grade pay recommended for a captain, however, was Rs 5,700 per month where as that for the civil service officer was Rs 6,100. Similarly, the grade pay of Rs 6,600 was proposed for a lieutenant colonel, while that of Rs 8,300 was proposed for his IAS counterpart.
Grade pay is an important issue as it is the sole determinant of status of central government employees vis-à-vis the civil services. Military personnel have been pointing out that successive pay commissions have been consistently downgrading their status.
Another important issue if the newly introduced Military Service Pay (MSP), recommended at Rs 6,000 per month for officers and Rs 1,000 per month for personnel below officer rank (PBOR). It has now been agreed to double the MSP for PBOR to Rs 2,000.
Introduction of the MSP would also result in working out a modified parity for personnel who have retired before January 1, 2006, the retrospective date for which the approved recommendations of the pay panel are to be implemented. Sources said that earlier retirees would be benefited by an amount equivalent to 50 per cent of the MSP in their pension fixation.

Warrant of Precedence tinkered yet again, what does it mean for the Military ?

Well, the defence services bear the brunt again. The WoP was last overhauled in 1979 and the primary character has been maintained thereafter with small additions here and there.

The Govt however has carried out changes in Oct 2007 which are now being circulated within the govt machinery. How do these changes affect the military ? Here’s an outline :-

a) Chairperson UPSC upgraded to Article 9-A over Service Chiefs who are on Article 12. Chairperson UPSC was earlier on Article 17 below Service Chiefs and also below Officiating Chiefs of the rank of Lt Gen who were on Article 16.

b) Chairpersons of National Commissions for SCs and STs (Yes, there are now two separate commissions for SCs and STs !) added on Article 17. Both these Chairpersons are higher than Army Commanders / Vice Chiefs who are on Article 23.

c) Members of National Commissions for SCs and STs added on Article 23 with Army Commanders / Vice Chiefs.

As we all know, Army Commanders / Vice-Chiefs are equated with Secretaries to Govt of India on Article 23. However Note 10 (C) of the WoP makes an interesting reading :-

“Note 10 :

In Article 23: -

(a) ***
(b) ***

(c) In official functions held at Delhi/New Delhi, Army Commanders/Vice Chief of the Army Staff or equivalent in other Services will always rank after Secretaries to the Government of India.”

Coupled with the fact that the 6th CPC has now explicitly stated that the pay of Senior Administrative Grade (SAG) of the civil services shall be equivalent to a Major General of the Army, the above changes again reflect the constant downgradation of military ranks in our society. It’s another issue altogether that vide a notification issued in 2008, IAS officers would now reach the SAG in 14 years of service while a defence officer becomes a Maj Gen (if at all) in 33. On the other hand, 100% of directly recruited IAS officers reach the SAG while less than 2% become Maj Generals (or equivalent) in the services.

The new amended Indian Central WoP can be accessed at :
The latest Indian Warrant of Precedence (Amended till 2008)



Our neighbour, Bangladesh meanwhile, has also taken out an amended WoP (revised edition – 07 Feb 2008) which can be accessed at :
The latest Bangladesh Warrant of Precedence (Amended till 2008)


Not that this exercise is of any practical use, but still here are some comparative notes from the revised Bangla version dated 07 Feb 2008 :-

a) In Bangladesh, the Cabinet Secy is listed alongwith the Chiefs on Article 12. In India, the Cabinet Secy is on Article 11 while Chiefs are lower on Article 12.

b) In Bangladesh, Chairperson Public Service Commission, Secretaries to Central Govt and Major Generals enjoy the same precedence on Article 16. In India, Secretaries to Central Govt are equated with Vice Chiefs / Army Commanders holding the ranks of Lt Gen on Article 23 and above other Lt Generals who are on Article 24. Chairperson UPSC is now (since Oct 2007) on Article 9 ahead of all of them.

c) In Bangladesh Joint Secretaries to Central Govt (with 25 + years’ service) are listed with Brigadiers with comparative service on Article 21. Other officers holding the status of Joint Secretaries to Central Govt are equated with full Colonels on Article 22. In India, Joint Secretaries to Central Govt as well as other officers of equivalent rank are equated with Major Generals on Article 26.

d) In Bangladesh, a DIG of Police is equated with a Lt Col on Article 24. In India, the 6th CPC has (incorrectly) equated a DIG with a Brigadier.


In the ultimate analysis, this is what we have achieved, status and parity wise, in the past one year :-

1. DIG is now officially equivalent to a Brigadier according to the 6th CPC.

2. Ministry of Home Affairs declares that all IPS officers shall attain the rank of DIG in 14 years’ service.

3. Senior Administrative Grade (SAG) is now officially equivalent to the rank of Major General as per 6th CPC.

4. Department of Personnel and Training declares that all IAS officers shall attain the SAG in 14 years of service.

5. What would be achievable by 100% IPS officers in 14 years would now be achievable by 7% defence officers in 28 years.

6. What would be achievable by 100% IAS officers in 14 years would now be achievable by 2% defence officers in 33 years.

7. Chairperson UPSC jumps from Article 17 of Warrant of Precedence to Article 9 whereas our Chiefs remain at Article 12.

Better modified parity for pre-2006 retirees by the anomalies committee ?

Though still not officially confirmed, officers involved with the Committee of Secretaries looking into the 6th CPC anomalies have hinted that a better modified parity for pre and post 6th CPC retirees may be put into place. Also a parity fitment amount of Rs 3000 in pension on account of MSP (50% of the MSP) for officers may also be in the offing. The same would be implemented for PBOR depending upon the amount of MSP ultimately recommended for PBOR. The earlier MSP @ Rs 1000 for PBOR is surely going to be upwardly revised. But please remember that this is not official as yet and neither has it been formally confirmed, so wait till the results are announced….. :-)

A slide show on Benefits & Privileges : Servicemen(/women) and Veterans

On popular demand, here is a slide show on certain benefits and privileges available under various laws and schemes to defence personnel and veterans.

Accident during training exercise is ‘Battle Casualty’ : High Court

In a significant decision, the Hon’ble Punjab & Haryana High Court has held that an accident taking place during battle inoculation or a training exercise should be declared as a battle casualty. Smt Manit Kaur lost her husband in a training exercise who died while hooking his gun with a Kraz Truck. He got crushed between the truck and the gun. Battle casualty status and subsequent liberalized family pension was however refused to Manjit Kaur on the ground that the accident did not involve ‘live ammunition’. The Hon’ble High Court has held that the contention of the Ministry of Defence was misconceived in this regard and the rules as applicable then did not have any stipulation of ‘live ammunition’ and as such Smt Manjit Kaur was entitled to the benefit of liberalized family pension by considering her husband’s death as a ‘battle casualty’.

Army Selection Board Proceedings disclosable : Central Information Commission

The Central Information Commission (CIC), in an important decision has held that while ACRs of Army Officers are not disclosable under the RTI Act, the same cannot be said about Selection Board proceedings. The Chief Information Commissioner on 06th June 2008, while dealing with an appeal filed by Brig Deepak Grover, has directed the MoD/Army to disclose full information relating to the Selection Board as was sought by the serving officer. The CIC has also not agreed with the govt that disclosure of such information would be detrimental to national security or would result in revealing the ‘organization of battle’.

The following is the link to the complete order :-

http://cic.gov.in/CIC-Orders/WB-06062008-04.pdf

V IMP :Grant better pensionary benefits to all PBOR retirees irrespective of date of retirement : High Court

VERY IMPORTANT : Grant better pensionary benefits to all PBOR retirees irrespective of date of retirement and provide improved pension with effect from 1-1-1996 and not from 1-1-2006 : Punjab & Haryana High Court


The Govt of India had constituted a Group of Ministers (GoM) to look into the demand of ‘One Rank One Pension’ (OROP) and the report was submitted in the year 2006. While not accepting the demand of OROP in totality, the GoM had recommended a parity and additional weightage for PBOR irrespective of date of retirement / discharge and that too with relation to the maximum of post 1-1-96 (post 5th CPC) pay scales. An additional weightage to all existing, past and future pensioners @ 10 years for Sepoy, 8 years for Naik and 6 years for Havaldar was also recommended which in simple terms meant that a Sepoy retiring with 15 years service was to be granted a pension by taking his service as 25 years. And the positive aspect of this was that this additional weightage was to be granted for all pensioners irrespective of date of retirement and the calculation was to be made by taking the maximum end of post 1996 scales even for pre 1996 retirees. As a result, to take an example, the pension of a Sepoy who retired around 1996 with 15 years of service was enhanced to Rs 2245 (excluding DA) while that of a Sepoy who retired in 1947 was enhanced to Rs 2208 (excluding DA), a very minor difference. This policy has already been implemented but till date remains unknown to many of our veterans - but that’s another story altogether. The nomenclature of OROP was not given to this policy so as to avoid demands for the same from other sections of employees, instead it was referred to as ‘modified parity’ or ‘improvement in pension of PBOR’ and a minimal difference for that reason was kept between pension of retirees of different eras (though it remains to be seen how it would be configured with 6th CPC recommendations). The aim of the policy was to grant an across the board increase in weightage to all retirees irrespective of the date of retirement and to base the pension on the maximum of post 1996 scales (you may call it “one rank - one weightage - one scale” policy :-) ) and to remove an anomaly which arose after 5th CPC due to which pre-1996 pensioners were at a loss.

The relevant part of the said policy is as follows :

“2. Finally, GOM unanimously recommended that the
pension of pre 1.1.1996 retiree PBOR may be revised with
reference to the maximum of post 1.1.1996 pay scale. In
addition, the weightage of Sepoy, Naik and Havildar ranks for
past as well as future retirees be increased to 10, 8 and 6 years
respectively subject to a maximum qualifying service of 30
years. The benefit would be given only in respect of service
pension.

3. The above recommendations of the GOM have been
accepted by the Government. Sanction of the President is
hereby accorded to the modifications to the extent specified in
this letter in the relevant Rules / Regulations / Instructions
concerning pensionary benefits of the PBOR.”

The said policy was however only implemented with effect from 1-1-2006. The same was challenged in the Hon’ble Punjab & Haryana High Court. In a major decision affecting all PBOR, the High Court has now held in Civil Writ Petition No 6223 of 2007, that the said policy would be applicable from 1-1-1996 and not from 1-1-2006 as made applicable by the Central Govt because the aim of the policy was also to remove an anomaly created by the 5th CPC. The Hon’ble Court has held that since the anomaly arose in 1996, it would have to be removed with effect from 1996 and not 2006. The Hon’ble Court has also observed the following :-

“The plea of financial constraints has been raised in respect of lowest paid employees of the Armed Forces, when all other categories of employees including services have been given the benefit. Such discriminatory treatment is wholly arbitrary.”