NEW DELHI: In a major relief to disabled defence personnel, Ministry of Defence (MoD) has directed the defence accounts department to withdraw a circular directing banks to deduct income tax from those pensioners affected by disability.

This had been a sore point with the retired pensioners as well as others in the armed forces as last year the defence ministry had said that income tax exemption on disability pension would be available only for those military personnel who have been ‘invalidated’ from service due to disability.

It was pointed out that the benefit would not be available for those with disabilities who retire after completion of their service.

The move led to an outcry in the defence fraternity with Defence Minister Rajnath Singh promising to look into the matter.

The three services chiefs had later recommended that disability pension for military personnel should be exempt from income tax only up to a certain limit and taxed beyond that.