Income tax benefits to paramilitary personnel on ration money, hardship allowance likely


NEW DELHI | April 4, 2019:

Jawans of paramilitary forces like the CRPF and the BSF are likely to get tax exemption on ration money allowance and risk and hardship allowance, officials said on Wednesday.

The move, when implemented, is expected to benefit about nine lakh personnel of paramilitary forces — CRPF, BSF, CISF, ITBP and SSB.

The finance ministry has given an assurance to the home ministry that it would consider the demand to exempt ration money allowance and risk and hardship allowance granted to paramilitary personnel from the purview of income tax, a home ministry official said.

In a recent letter to the home ministry, the finance ministry conveyed that the long-standing demand of forces would be examined during the ensuring budgetary exercise.

This was in response to a communication from the home ministry which raised the issue of tax exemption on ration money allowance given to paramilitary personnel on the basis of parity with other uniformed forces and Pay Commission recommendations.

Personnel of defence forces, Assam Rifles and NSG are given free ration while personnel of CRPF, BSF, CISF, ITBP and SSB are granted Ration Money Allowance (RMA).

Personnel of paramilitary forces up to non-gazetted ranks such as constable, head constable, assistant sub inspector, sub inspector and inspector are entitled to an RMA of Rs 3,000 per month.

The 7th Central Pay Commission in its report has recommended that looking into the unique service conditions of paramilitary personnel and since RMA is granted in lieu of free ration, it should be exempt from income tax.

"A strong case exists for exempting RMA of paramilitary forces from income tax," another official said.

In addition to the RMA, the home ministry in its letter to the finance ministry also raised the issue of exemption of risk and hardship allowance of paramilitary personnel from income tax, the official said.

The finance ministry has responded favourably to both the demands which would be examined in the next budget exercise, the official said.

Quantum of risk and hardship allowance varies from Rs 6,000 to Rs 25,000 per month per head, depending on various factors.