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Income Tax exemptions and deductions for Defence, CAPF, Paramilitary and other forces: Full list
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3 min read | Updated on July 31, 2025, 14:06 IST
SUMMARY
Tax benefits for Defence forces: Most of the exemptions and deductions available to defence personnel are generally applicable to civilian taxpayers. However, there are also some specific benefits.
The ITR forms do not capture the name of the force to which a defence taxpayer belongs. | Representational image source: Shuttersrtock
Like general taxpayers, the Income Tax Act, 1961 offers deductions and exemptions for serving and retired personnel from Defence Forces, CAPF, paramilitary forces and other security agencies.
Most of the exemptions and deductions available to defence personnel mentioned above are generally applicable to civilian taxpayers.
However, there are some specific benefits available only to the serving and retired members of the security forces. And these benefits, along with their prescribed conditions, are specified in the Income Tax rules, according to the Finance Ministry.
"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," Union Minister of State for Finance, Pankaj Chaudhary, said in a written reply to a query in the Rajya Sabha on July 29, 2025.
List of deductions and exemptions available to Defence Personnel
| Section | Description |
|---|---|
| Section 10(10) | Gratuity or death-cum-retirement gratuity received, subject to prescribed conditions. |
| Section 10(10A) | Payment in commutation of pension received, subject to prescribed conditions. |
| Section 10(18) | Income by way of: • Pension received by individuals awarded gallantry awards like Param Vir Chakra, Maha Vir Chakra, Vir Chakra, etc. • Family pension received by their family members. |
| Section 10(19) | Family pension received by widow, children, or nominated heirs of armed forces personnel (including paramilitary), where death occurred during operational duties, subject to prescribed conditions. |
| Section 10(23AA) | Income received on behalf of Regimental or Non-Public Funds established by the armed forces for welfare of members and their dependents. |
| Section 10(26BBB) | Income of a corporation established by a Central, State, or Provincial Act for the welfare and economic upliftment of ex-servicemen who are citizens of India. |
| Section 80CCH | Deduction for contributions to the Agnipath Scheme made by the Central Government and individuals enrolled in the scheme and subscribing to the Agniveer Corpus Fund on or after November 1, 2022. |
| Other Deductions | Additional exemptions and deductions under Chapter VIA available to individual taxpayers, including Sections 80C, 80D, 80E, 80G, 80TTA, depending on the choice of the Old Tax Regime. |
Source: Rajya Sabha
The Income Tax Return forms do not capture the name of the force to which a defence taxpayer belongs.
"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)," Chaudhary said.
"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," he added.
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