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Wednesday, July 29, 2009

(1) It’s tax time : Gallantry Awardees and Disability Pensioners should RELAX (2) GoI clarifies NPA not to be added into min of pay band for pension

It’s that time of the year again – time to pay income tax. But as mentioned earlier on this blog, gallantry awardees and disabled retirees are exempted from Income Tax on the entire pension. It would be worthwhile for such retirees to go through this earlier post for complete understanding of the requisite law and for downloading the requisite notifications if required.

Secondly, there was a controversy whether the NPA is to be added as an element in the minimum of the new pay bands for computing the new pension of pre-06 AMC retirees. The govt has clarified that NPA is not to be added into the pay band for computing pension of pre-06 AMC retirees as well as civil doctors. The directions of the govt are based on the 2006 decision of the Hon’ble Supreme Court in Col B J Akkara (Retd) Vs UOI. The clarification of the govt can be accessed by clicking here.


Warrior said...

Thanks Navdeep as usual you are quick to update us on the latest issue.But as per the judgement NPA not taken for pension because it does not forms part of basic pay,however in 6cpc scale of medical offficers (point to point fixation)NPA has been included.

My second point is regarding HAG scale to Lt Gen all Maj Gen who are promoted to Lt gen post 1.1.06 may actually be fixed lower than what they are getting in Pb4 as 12000 GP will not be there.Are we due for amendment in lines with Office memorendum issued for civilians on 21 july in which it protects GP of 12000 by adding 2000 after fixation

Harry said...

@ Maj Navdeep


Thanks for enlightning our gallantry awardees and disability pensioners about non applicability of Income Tax on their pension. There are quite a few veteran suckurs out their who are ignorant about it and there have been instances where banks have deducted tax unilaterally on their pension. Hopefully this post should help settle the issue for good for such kind !!

PS: Sir, I have sent U a personal mail for legal advice. Do reply pls its 'URGENT' ! Thanks in advance.

Anonymous said...

now that all doctors including retired civilians docs are affected it is expected that the civ docs would take the case of inclusion of NPA in calc of min pension to the courts again. they are expected to fight the case better, and win releif for all doctors. at every place in 6th cpc document it is mentioned that npa forms part of basic pay for all purposes including pensions and allowances but scheming babus have denied travel entt to doctors by linking it with grade pay and the supreme court has denied it in case of old pensioners (remember the min clause becomes applicable to older pensioners) due to lack of proper representation from the retired amc docs. hope the civil docs take up this matter and ask for a reddressal. also hope that the def est extends any relief given to civilian docs and not try to scuttle the issue the way it appears in the case of DACP.(olddoc)

chughs169@yahoo.co.in said...

Dear Maj Navdeep,
you are doing a great Service to the Defence Community. Regarding exemption from Income Tax to Awardees, It is informed that Mention -in- Despatch awarded for Gallantry during War has Not been included in the list, though awaards like Fire Service Medal and Civil defence medals have been included. I am holder of this award for 1971 Operations. State govt is also paying me Annuity for the award.I shall be grateful if this anomoly could be highlighted at suitable forum.
Brig. IJS Chugh (Retd)

Anonymous said...

1.Hope instructions are issued to banks /PDAs NOT to deduct TDS from the pensions of disabilty pensioners/gallantry awardees.
2. Are the family pensions in such cases also NOT subjected to Income Tax ?

Arun K said...

Thanks Navdeep.
At least we are clear on the inclusion / noninclusion of NPA while calculating the revised pension for pre 2006 Docs.( AMC and civilians pensioners).
Just a comment/ observation ---- the ""GOI, MOD Dept of ex-servicemen welfare letter no 17(4)2008(1)/D/pen/Policy) dated 21 May 2009 does not mention that there is a separate chart for AMC / ADCorps /RVC officers and goes on to say that the pension of pre 2006 Lt Col pensioners will be fixed at Rs 25700/- ((37400+8000+6000 / 2 = 25700)).""
Whereas the chart for Docs etc gives the start as 40010/- meaning thereof the pension will be calculated as ((40010+8000+6000 =54010 / 2 = 27005/-
At times one wonders whether this is accidental. Such Ommissions (?commissions) are too frequent to be accidental.
Permit me to add one more reference :
""Note 1 of Para 54. Of the Defence Accounts department , Office manual part -IV, Principal controller of Defence Accounts (pensions) volume –III Grants (commissioned officers) Section -----referring that NPA will be added to the basic plus rank (grade pay) for the purpose of calculating of pension.""
This is an revised 2006 edition. (found this reference while surfing the CDA pension site under training) So at times I wonder as to which document do they refer to while deciding on such matters.
The bigger problem is that the Banks / PDAs have not recieved the letters from CDA pension resulting in the disbursment of the pension read out from the charts.
Arun K

Capt P Sasidharan said...

Dear Maj Navdeep,

As per the extant instructions, admission to the educational institutes run by the Army Welfare Educational Society is offered to the children of Ex-SSCOs who have put in minimum 10 years of service in the Army.The enthusiastic children of many of the Ex-SSCOs are rendered deprived of an opportunity to join these disciplined institutes due to the above restriction. Since the courses are offered on payment of fees(which is not subsidised) and education at these places will in all probability motivate many children to join the army later following their fathers/guardians it is suggested that Army may consider making the children of those Ex-SSCOs with minimum 05 years of service also eligible to join the AWES run institutes in the country.


Arun K said...

Dear Navdeep
I request you to kindly advice us on what I have mentioned below and permit us to use your site as a medium to reach out to pre 2006 AMC Doctors pensioners on the issue of NPA not being clubbed with the basic while revising the pension consequent to the 6 CPC.

The Govt has quoted the Supreme court ruling on the appeal of Col Akkara who is A PRE 1996 PENSIONER i.e. an officer who retired when the recommendations of the 4 CPC were in place. In his case the court apparently ruled against him since when he retired NPA had not been included while revising his pension.
It must be clarified that the 4CPC of 1986 DID NOT INCLUDE NPA for the calculation of the pension. this was however revised and NPA was included in the 5CPC while calculating the pension.
It must also be added that when AMC docs proceeded on pension post the 5 CPC of 1996, NPA was included and now this order actually withdraws this benefit.

Permit me to add an extract from a mail addressed to me from Wg Cdr (Med) S C Marwah (retd):
Quote : ""Prior to the 4th pay commission report no allowances were added to the basic pay for calculation of the DA which had been authorized linked to the WPI by 3rd pay commission. The CGHS doctors strike in 1987 failed in all its demands but succeeded in getting NPA and the specialist pay added to basic pay for all purposes other than pension i.e.. For calculation of DA and other authorizations. The 5th pay commission rather unexpectedly agreed to the demand by CGHS doctors that NPA should be part of basic pay for Pension calculation."" unquote
Interestingly the 6 CPC continues to include NPA for fixing the penison in respect of Med offrs retiring wef 01 Jan 06.

Navdeep : request your comments on this.

Can I request you to add this to your site in a visible loc so that we can reach out to all affected. The problem is that this particular blog / trail is not so prominent perhaps consequent to restricted relevance.

This is also to request affected offrs from the AD Corps and
the RVC to join in, perhaps use this medium to get together and at least try to get a redressal (?? of grievances --- Gosh, am still using those terms even after 7 yrs of leaving)
Thanks and regards

Prasanna said...

Is there an excel sheet calculator for income tax, exclusively for faujis (self help). Would be grateful for any help on this count, even if someone has created one...

yes said...

Dear Major Novdeep,
I superannuated with attributable 20% disability in 2003.I've so far being paying IT.Pl let me know if my pension too is exempt from IT.
Lt Col Krishan Chand(retd)

taxworry said...


Good blog!
Your readers can benefit from this article

"What Are The Tax Benefits to Winners of Galantry Awards?"

paste this in your browser address http://taxworry.com/what-are-the-tax-benefits-to-winners-of-galantry-awards


HR Garg said...

Comments from Gp. Capt. HR Garg (AMC). Rtd. 1991 what is the way to get the relief on this NPA issue? Para 5 of the 6th CPC letter dt. 11.11.2008 narrates the procedure to arrive at the pension of the pre- 01-01-2006 retirees that it will not be less than 50% of the minimum revised pay in the samrank'Thus if the new Col. Doc. gets NPA in his pay then 50% of this is to add to the pension of the pre 06 Doc. Col. Putting the pre 06 Pension and 06 effective Pay letters togather will sortout the issue If not agreed there is a Court case.But before that action all concerned should approach the Pr.CDA(Pen) Allahabad first with this logic.


I B.K TIWARI (Ex - Naik) in receipt of disability pension & I am unable to reflect the same as i don't know the IT section under which 100% disability pension is exempted from income tax. Hence, please tell me that IT section so that i can claim tax exemption on my disability pension.
I will be very thankful for your co-operation in this matter.
Thanking You
Jai hind .