Hello,
I am an Ex. cadet of the Indian Military Academy who was medically boarded out due to an injury attributable to military training. I receive a monthly ex-gratia award (ex-gratia + ex-gratia disability award), the rate of which gets revised from time to time as per the applicable DA/Pay Commission.
I always believed I receive a disability pension, but recently found out that the monthly ex-gratia awarded to medically boarded out ex-cadets is not categorized as ‘disability pension.’
While the disability pension awarded to armed forces personnel (including medically boarded out recruits) is exempt from Income Tax (IT), there is a lack of clarity when it comes to the taxability of monthly ex-gratia awarded to Ex. officer cadets.
Assuming I need to fill ITR - 1 as I only have monthly ex gratia income + interest income. Could you pls clarify if:
1) my monthly ex-gratia income is exempt from IT? If yes, under which section I need to declare it?
2) In case its not exempt from IT, will it be declared as 'income from salary'?
3) Is the pending DA (Dearness Allowance) arrear and the 7th CPC arrear taxable or not? How will the two amounts be declared (under which section) in either case?
Pls also share the relevant govt. circular so that I can quote it in case there is a need to do so.
Thanks in advance for your help.
Regards
