Congress slams tax on disability pension, seeks rollback of policy

The Congress on Wednesday (February 18, 2026) criticised the government’s move to levy income tax on disability pensions of disabled armed forces personnel, calling it an “insult” to soldiers’ sacrifice and warning of its impact on morale.

Addressing a press conference, AICC Ex-Servicemen Department chairman Col. (retired) Rohit Chaudhry, along with Col. (retired) S.P. Singh of the Indian Ex-Servicemen League, said that as per the Finance Bill 2026, the income tax exemption was granted to only those personnel who were wounded in action and were invalided out from service on receiving a bodily disability.

Through this clause, the government had removed the income tax exemption from the recipients of disability pension who got bodily injuries during action and were retained in service and also from those who had got the disability attributable to or aggravated due to military service conditions.

The ex-servicemen community urged the government to retain full tax exemption on disability pensions and withdraw the new disability policy introduced in 2023, Col. Chaudhry said.

The party demanded restoration of the status quo under the Income Tax Acts of 1922 and 1961, which kept such pensions tax-exempt.

He said that under both the 1922 and 1961 Income Tax Acts, disability pensions for personnel injured in action or whose disabilities were attributable to or aggravated by service conditions were kept outside the tax net, whether they were invalided out or retained in service.

He alleged that the government had been attempting to tax such pensions since 2016 and had now restricted the exemption, under the Finance Bill 2026, only to those invalided out after being wounded in action.

He said the move would bring under taxation personnel who continued in service despite injuries or those whose disabilities were linked to harsh service conditions.

Referring to the 2023 disability policy, he said the renaming of disability pension as “impairment relief” had effectively made it taxable for new pensioners.

Citing the example of Field Marshal Sam Manekshaw, who rose to the top despite being wounded in battle, Col. Chaudhry said retaining injured soldiers had long been part of military tradition and morale building.

The Congress claimed the decision could affect nearly two lakh disabled soldiers and warned of nationwide protests, beginning at Jantar Mantar on March 1, if the move was not reversed.