INCOME TAX DEDUCTION ON DEFENCE PENSION

INCOME TAX DEDUCTION ON DEFENCE PENSION

The Financial year 2016-17 had created an unprecedented increase in the pension because of the payment of Delinking Arrears. OROP 2^nd Instalment and 7^th CPC arrears.  This arrear payment had caused Tax Deduction from December, 2016 even to a low paid pensioner. This tax deduction will continue till March, 2016. You have to file IT Return and get refund.

Many banks have made TDS at 10% and 20% irrespective of the age of the pensioner and PAN number registration with the Bank.  An 80 years old pensioner (A Sepoy) will not be subjected to any TDS even with all the arrear payment.  But the some banks have deducted tax to these aged pensioners.  Many of these old pensioners do not have PAN Cards and it is very difficult for them to get refund of the Tax Deducted.  Instead if the Banks have made proper calculation of Tax for these old pensioners, this could have been avoided.

These pensioners come into the tax bracket only for the assessment year 2017-18 because of the arrear payment.  Now in order to get refund (Tax relief) they have to apply for PAN Number, file Form 10E online and approach an Auditor for claiming refund.

A 55 years old Low paid Sepoy Pensioner have been charged Rs.10,234 as Tax for the Assessment year 2017-18.  (The Tax Rebate of Rs.5000 under Section 87 is not taken for TDS)

Same way a 81 years old low paid Sepoy Pensioner have been charged Rs.11848.  If the age of the pensioner was taken into account while computing TDS no Tax would have come for him.

Now that everything has been done.  Now the only remedy to get refund of the Tax deducted  is to go to an Auditor and file Tax return immediately.  Otherwise, you will not get the refund.

All pensioners have to submit PAN Number to the Bank immediately.  Those who want to claim refund have to file Form 10E online.

It is better that all the Defence Pensioners file Income Tax Return  every year.