New Delhi: The Union government’s decision in the recently-announced budget to discontinue income tax exemption available to defence personnel who receive disability pension has drawn severe flack from military veterans, who have slammed the government over the development.As per the budget, from now on, the exemption could be availed by only those armed forces personnel who were “invalidated” out of service midway owing to bodily disability. Personnel who retired after completing their full tenure (superannuation) with a disability can no longer be eligible to avail this tax exemption, reported The Telegraph.Military veterans have said that the decision will have significant consequences for disabled pensioners because at present the number of superannuated personnel was much higher than those invalidated out of service.“The nation’s security was first eroded by the Agniveer scheme and now with the attack on disability pension it is destroying the ethos of commitment of the professional soldiers to any security threat natural or man-made. The last nail on the coffin of a nation’s defence is being struck,” said former major general Shail Jha in a post on X.Till date, soldiers who become disabled during service are retained in service through sheltered appointments for administrative work. When a serving army officer is injured and disabled on duty, the benefits they can avail include a disability pension, treatment for life and an additional tax-free disability pension.“In the finance bill 2026, the Government, in a fit of extreme benevolence towards war wounded and disabled veterans/ service personnel, removed all income tax exemption benefits on war injury and disability pensions when such brave hearts continue to serve till superannuation. Wow!” retired major general Birender Dhanoa wrote on X.“In the services today, if you are wounded in the line of duty and invalided out, no indexation of pension but your income is exempt from tax. If you continue to serve till retirement, you get pension indexation but no income tax benefits. Either way the house (I mean Govt) wins,” he added.He added that the tax exemption which has been removed now was in place since 1922.The Telegraph quoted a former colonel who questioned how could there be two classes of disabled pensioner soldiers while extending income tax exemption.“It is shocking that the government is now again discriminating against soldiers who suffer disability while serving the country,” he told the newspaper.