Non-Deduction of Income Tax at source from Pension in respect of Gallantry Awardee
GOVERNMENT OF INDIA
DEPARTMENT OF EXPENDITURE
CENTRAL PENSION ACCOUNTING OFFICE
TRIKOOT-II, BHIKAJI CAMA PLACE,
NEW DELHI-1 10006
No. CPAO/IT&Tech/Gallantry Award/26/2020-21/06
All the Authorized Banks involved in disbursement of pension are to draw their attention towards provisions of Section-10, clause 18 (i) of Income Tax as notified vide Ministry of Finance, Department of Revenue, CBDT Notification dated 24th November, 2000. This notification provides for exemption of application of Income Tax for the pension received by an individual who has been in the service of the Central Government or State Government and has been awarded Gallantry Award as may be specifically notified by the Central Government from time to time. Family pension received by any member of the family of such individuals is also exempt. The referred clause also clearly indicates that no deduction of income tax should be made in the case of recipients of such awards.
2. Despite these clear provisions of the Act, it has come to notice of this office that the above provision of Income Tax is not being complied with in its letter and spirit by the certain pension disbursing banks.
3. All the pension disbursing banks are, therefore, required to ensure that the Income Tax at source is not to be deducted from pension in respect of Gallantry Awardee as per the provision of Section 10 clause 18(i) of the IT Act, CBDT Notification dated 24th November, 2000. The provision of Income Tax is to be followed scrupulously without fail by all pension Disbursing Banks.
This issues with the approval of the Controller General of Accounts.
(Chief Controller of Pensions)
1. All CGMs/ GMs (Govt. Business) of Authorized Banks/ Pension Disbursing Banks(as per list)
Copy for information to,
1. Joint CGA(ARPR), O/o CGA