In response to a Rajya Sabha question from Ms. Swati Maliwal concerning the income tax liabilities of security personnel, the Ministry of Finance clarified its data collection and policy positions. The Minister of State, Shri Pankaj Chaudhary, stated that the Income Tax Department’s records do not categorize taxpayers by specific security agencies like Defence Forces or Paramilitary Forces. Instead, the data is grouped under broader labels such as “Central Government” or “Pensioners,” making it impossible to provide the requested details on the number of filers and tax revenue collected from these specific groups. The minister then provided a list of current tax exemptions and deductions available to these personnel under the Income-tax Act, 1961, including specific benefits for gallantry award recipients and those under the Agnipath Scheme, as well as general deductions available to all individual taxpayers. Finally, the response confirmed that there has been no analysis of how many personnel remain taxable despite a ₹12 lakh exemption, and that there is no current proposal for a tax policy review for these personnel.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF REVENUE
RAJYA SABHA
UNSTARRED QUESTION NO. 1049
ANSWERED ON – 29/07/2025
‘Income Tax Exemptions and Liabilities of Security Personnel’
1049. Ms. Swati Maliwal:
Will the Minister of FINANCE be pleased to state: –
a. The number of serving and retired personnel from the Defence Forces, CAPFs, Paramilitary Forces, and other security agencies who filed Income Tax Returns in the past five years, categorized by force and rank;
b. Total Income Tax Revenue collected from them during this period, including on salary, pension, allowances, and other income, listed force-wise and year-wise;
c. The details of current tax exemptions, deductions, and benefits applicable to such personnel;
d. Whether Government has analysed how many remain taxable despite the recent ₹12 lakh exemption and the findings, force-wise; and
e. Whether a tax policy review is being considered in recognition of their service?
ANSWER
THE MINISTER OF STATE IN THE MINSITRY OF FINANCE
(SHRI PANKAJ CHAUDHARY)
(a): Data in respect of the nature of Employment available in the Income Tax Returns includes only the following categories:
Central Government, State Government, Public Sector Undertaking, Pensioners-Central Government, Pensioners-State Government, Pensioners-Public Sector Undertaking, Pensioners-others, Others and NA (Not Applicable).
Details with regard to classification of Employer into Defence forces, CAPs, Paramilitary forces, other security agencies are not captured in the Income Tax Return. Hence, the requisite details are not available.
(b): Data is not available in view of answer to Part a) above.
(c): The Income-tax exemption and deductions as per the following sections of the Income-tax act 1961 are available to the serving and retired personnel from Defence Forces, CAPFs, paramilitary forces, and other security agencies:
| Sr. No. |
Provisions under the Income Tax Act, 1961 containing relevant exemptions, deductions, and benefits |
Description |
| 1. | Section 10(10) | Any gratuity or death-cum-retirement gratuity received subject to the conditions prescribed therein |
| 2. | Section 10(10A) | Any payment in commutation of pension received subject to the conditions prescribed therein |
| 3. | Section 10(18) | any income by way of—
|
| 4. | Section 10(19) | family pension received by the widow or children or nominated heirs, as the case may be, of a member of the armed forces (including para-military forces) of the Union, where the death of such member has occurred in the course of operational duties, in such circumstances and subject to such conditions, as may be prescribed; |
| 5. | Section 10(23AA) | Any income received by any person on behalf of any Regimental Fund or Non-Public Fund established by the armed forces of the Union for the welfare of the past and present members of such forces or their dependants; |
| 6. | Section 10(26BBB) | any income of a corporation established by a Central, State or Provincial Act for the welfare and economic upliftment of ex-servicemen being the citizens of India. |
| 6. | Section 80CCH | Deduction in respect of contribution to Agnipath Scheme made by Central Government and an individual enrolled in the Agnipath Scheme and subscribing to the Agniveer Corpus Fund on or after the 1st day of November, 2022 |
| 7. | Other Deductions | Beside the above, various other exemptions and deductions as per Chapter VIA are available to such personnel which are available to individual tax payers as per the Income-tax Act, 1961 such as Section 80C, 80D,80E, 80G, 80TTA (depending on the option of Old Tax Regime |
It is relevant to state that the provisions mentioned in the above table are generally applicable to taxpayers at large, while certain specific benefits are extended exclusively to serving and retired personnel of the aforementioned forces, subject to the conditions prescribed therein.
(d) Data is not available in view of answer to Part a) above.
(e) At present, no such proposal is under consideration.
