The past few weeks have witnessed a new low in warfare. It is an all-out war between the government and Army HQs on one side, and veterans of the armed forces on the other, on disability pensions. It began with a letter issued by the Central Board of Direct Taxes (CBDT) of the Department of Revenue under the Ministry of Finance (MoF) on 24 June, which removed tax exemptions granted to disabled personnel of the armed forces.

These were initially granted under section 60A of the Indian Income Tax Act of 1922 and remained valid till now. It is only the armed forces who have been granted this privilege. The letter issued by CBDT states that this exemption would remain for those who have been validated out of service “on account of bodily disability attributable to or aggravated by such service.” It implied that it would cease for those who continued to serve even after suffering a disability.

Presently all who have been disabled and continue in service draw their salaries and not disability pensions. They are fruitfully employed in appointments which suit their disability as also pay tax on their income. Tax concessions arise post retirement. MoF has also ignored the fact that those who serve pay tax throughout their service, while those boarded out don’t. Hence it is better to retain soldiers for as long as possible than release them.

It is essential to determine who initiated the idea – service HQs, Ministry of Defence (MoD) or the MoF itself? Defence Minister Rajnath Singh in a statement to parliament, during a discussion on this topic raised by the Congress, and in his interaction with representatives of the Indian Ex-Servicemen Movement (IESM) on 01 July, stated these instructions were issued by the MoF and not the MoD. A summary of the meeting of 1 July issued by Group Captain VK Gandhi, Vice-Chairman of IESM, stated, “Raksha Mantri explained that this instruction has been issued by MoF and not MoD.” Service HQs cannot communicate with any ministry without involving the MoD.

A letter sent by the Armed Forces Medical Services to the defence ministry in 2014 stating misuse of disabilities by senior officers was also doing the rounds as the factor responsible for this decision. This letter was addressed to the defence secretary and not the finance ministry. However, even if this letter is considered, such an action cannot be taken without obtaining data from the MoD and discussing the case with them.

Mrs Nirmala Sitharaman having till recently handled defence would be aware of increasing cases of disabilities. Whether she was behind the issuance as finance minister remains a matter of conjecture.

It is evident that the decision to issue the letter flowed from the MoF itself. It could also be aimed at hitting at the core of military benefits, as these are not granted to any other central service. This action, if taken in isolation by the MoF, is deplorable, as it indicates a vindictive bureaucracy, which has acted without seeking the views of the parent ministry.

A new low in the battle was the release of an unsigned and undated document, after the first television debate on the subject. The letter was circulated initially by the finance minister in a tweet which stated, ‘Response of the armed forces on the issue of taxability of disability pensions.’ It was subsequently released by the Army Public Relations Department (ADGPI), admitting ownership.

The specific mention of General Cardozo’s name at the commencement of the letter and the tweet of the finance minister indicated that the letter was written after the government order and the debate on a television channel and not prior to issuance of CBDT directions. However, it implied that army HQs supported the government’s decision of curtailing tax benefits to disabled veterans.

The letter claimed that the system is being exploited by some to gain disability prior to retirement to avoid paying tax. It stated, “Over the years broad-banding and compensation awarded for disability with income tax exemption has led to rise in personnel seeking disability, even for lifestyle diseases. The trend is worrisome.” If this was the concern of the army, then it should have sought to address this concern, rather than support a rash decision of the MoF.

Thus, the battle is now out in the open, with the veterans’ community blaming the MoF, MoD and service HQs for discontinuing tax benefits. Neither MoF, MoD nor service HQs have individually taken responsibility for the decision. While Army HQ has reacted, the MoF maintains silence.

It is not the financial aspect which has hurt the veteran community, but the way instructions were passed and the support they received from service HQs. Further, in India no one approves removal of privileges. Neither MPs nor bureaucrats will accept reduction in pensions, so why should disabled veterans accept cancellation of IT benefits on their rightful dues?

The world over, studies have proved that there is a direct linkage between military service and lifestyle diseases. This is more pronounced in our case as soldiers serve in varying terrain and climatic conditions from Siachen to Rajasthan and onto the humid North East. In addition, serving in insurgency-impacted regions and lack of family accommodation in peace stations impact mental health of a soldier. These lead to so-called lifestyle diseases and cannot be ignored.

A legal battle would commence and the MoF’s directions held in cold storage till the ultimate outcome, which may take years.

However, bad blood created by Army HQ based on its letter would remain. There have been multiple instances in the past where service HQs have claimed that the MoD is insensitive to its demands. This is a clear case of service HQs being insensitive to its own veterans. It is never too late for rectification. Service HQs must accept responsibility and issue a statement mentioning amending internal rules to prevent misuse, while approaching MoF to reconsider its decision. This action would uphold the Chetwode credo which all military personnel know well. The faster Army HQs acts, the better.

The writer is a retired Major General of the Indian Army