Soldiers guard our lives and living territory day and night. The Government offers a decent and reasonable compensation in monetary terms for their sacrifices and efforts. In addition to the Allowances, certain exemptions are exclusively available to our soldiers on the allowances available to them for the additional risks they undertake.
There are the major exemptions available to the Indian army, navy, air force and other defence personnel.
Income Tax Exemptions on Defence Allowances
Counter-insurgency Allowance (Section 10(14)):
This allowance compensates Armed Forces members deployed in insurgency-prone areas, acknowledging the risks and challenges they face.
It is partially exempt under Section 10(14) to alleviate financial burdens.
Exemption limits for Counter-insurgency Allowance are:
Junior Commissioned Officers (JCOs) and Other Ranks: Up to ₹ 3,900 per month.
Commissioned Officers: Up to ₹ 4,200 per month.
High Altitude Allowance (Section 10(14)):
This allowance supports personnel stationed in high-altitude regions, offering financial relief for the demanding conditions. There are two categories:
Category I (Altitude 9,000 to 15,000 feet): Exempt up to ₹ 1,060 per month.
Category II (Altitude above 15,000 feet): Exempt up to ₹ 1,600 per month.
High Active Field Area Allowance (Section 10(14)):
For personnel operating in intensely active field areas, this allowance provides relief for heightened risks and challenges. Up to ₹ 4,200 per month is exempt for both JCOs and Officers under Section 10(14).
Island Duty Allowance (Section 10(14)):
Compensates personnel posted on isolated islands, offsetting difficulties in living conditions and resource access. Exempt up to ₹ 3,250 per month for both JCOs and Officers under Section 10(14).
Transport Allowance (Section 10(14)):
Aids in meeting travel expenses between residence and duty station. Exempt up to ₹ 3,200 per month (₹ 38,400 per year), particularly beneficial for disabled or blind taxpayers.
Uniform Allowance (Section 10(14)):
Covers expenses for purchasing and maintaining uniforms during duty. Exemption extends to the actual expenditure incurred on uniforms, provided receipts are maintained.
Disability Pension Indian Army (Section 10(14)):
Supports Armed Forces personnel disabled during service, with the pension being fully exempt under Section 10(14), comprising service and disability components.
Family Pension (Section 10(19)):
Pensions received by families of deceased Armed Forces personnel are fully exempt from tax under the Income Tax Act 1961.
Pension to Gallantry Award Winner (Section 10(18)):
Pensions received by recipients of specified gallantry awards are exempt from tax.
Donations to Corporation for Ex-servicemen (Section 80G):
Donations to specified funds aiding ex-servicemen are eligible for deductions under Section 80G, reducing taxable income.
Income from Regimental Fund (Section 10(23AA)):
Income received from Regimental Funds established for the welfare of Armed Forces members or their dependents is exempt from tax.
Agniveer Benefits under Section 80CCH of Income Tax Act
What Are The Tax Exemptions U/S 80CCH?
Section 80CCH offers the following benefits under the old and new tax regimes:
The contributions made to the Agniveer corpus fund by individuals and the Central Government are eligible for tax deductions under 80CCH. All individuals who have enrolled on the scheme on or after November 1, 2022, can claim the benefits.
Additional points to note:
File the ITR well before the due date to avoid penalties and interest
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