Instruction No 136

F.No. 34/3/68-IT(AI)
Govt of India
Central Board of Direct Taxes
New Delhi, dated the 14th Jan 1970

From :
Shri S N Nautial
Secretary, CBDT

To:
All Commissioners of Income Tax

Subject : Exemption – Service and Disability Element of Disability Pension granted to a

disabled officer of the Indian Army – whether exempted from Income Tax.

Reference is invited to the Board’s Letter F No 42/9/59-IT(AI), dated the 5th Sept
1960 on the above subject wherein it was mentioned that in the cases falling under Item
(29) of Finance Deptt Notification No 878-F (Income Tax) dated 21-3-1922, the
‘disability element’ of the disability pension received by an officer of the Army will only
be exempted from tax and that the ‘service element’ will be subjected to tax.

2. On reconsideration of the matter, in consultation with the Ministry of Law, the

board are advised that item 29 of the notification does not differentiate between types of
pensions. Accordingly in the cases falling under item 29 of the above notification, entire
disability pension will be exempted from income-tax.

3. The above instructions may be brought to the notice of all assessing officers in
your charge.

Yours faithfully,
Sd/-
(S N Nautial)
Secretary CBDT

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 2nd July, 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 inspite of Board’s Instruction No 136 dated 14th January 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)