The Central Pension Accounting Office (CPAO), under the Ministry of Finance, Government of India, has issued an Office Memorandum (OM) dated 22nd August 2023. The memorandum refers to a previous OM dated 12th May 2021, which had communicated the requirement for pension disbursing banks to refrain from deducting Income Tax at source from the pension payments of Gallantry Awardees. This exemption was based on Section 10 clause 18(i) of the Income Tax Act and a CBDT Notification from 24th November 2000.
Clarification on Income Tax Deduction for Gallantry Awardees’ Pension
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF EXPENDITURE
CENTRAL PENSION ACCOUNTING OFFICE
TRIKOOT-II, BHIKAJI CAMA PLACE,
PHONES : 261 74596, 26174456, 26174438
CPAO/IT&Tech/ Misc.Corres/35 (Vol-II) (PF)/10370/2023-24/ 109
Attention is invited to this office OM No. CPAO/IT & Tech/Gallantry Award/26/2020-21/06 dated 12.05.2021 wherein it was stated that all the Pension disbursing banks are required to ensure that Income Tax at source is not be deducted from pension in respect of Gallantry Awardees, as per the Provisions of Section 10 clause 18(i) of the IT Act, CBDT Notification dated 24th November, 2000.
- It is observed that the banks are not complying with the instructions as this office has been receiving grievances regarding deduction of income tax from pension of Gallantry Awardees.
- In view of the above, Heads of CPPCs/GBDs of all Authorized banks are requested to follow the instructions issued by the Income Tax department, on the subject, without fail.
This issues with the approval of the Chief Controller (Pensions).
Sr. Accounts Officer (IT Tech)