The Defence Pension Scheme in India is a retirement scheme for retired personnel from the Indian Armed Forces, their families, and civilian employees of Defence establishments. The Ministry of Defence manages this scheme, which aims to secure the livelihoods of defence personnel post-retirement.
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Defence Pension Scheme is an initiative of the Government of India that provides a monthly pension and other benefits for the well-being of retired defence personnel from the Indian Army, Indian Navy, and Indian Air Force.
This pension plan benefits the following individuals:
Retired Commissioned Officers (minimum 20 years of service)
Retired Personnel Below Officer Rank (minimum 15 years of service)
Civilian employees working in Defence establishments
Families of deceased armed forces personnel
This army pension scheme recognizes the sacrifices and services rendered by military personnel in the defence of their nation.
The key features of a defence/ army pension scheme's best investment options are as follows:
Features | Details |
Launched By | Government of India |
Administered By | Ministry of Defence |
Beneficiaries | The scheme offers pensions to the following personnel and their families:
|
Pension Benefits | Provides a regular defence/ army pension to retired military personnel based on:
|
Disability Pension | Defence pension to ex-servicemen injured or disabled during their service in the armed forces. |
Family Pension | Army/ Defence pension to the spouse or dependents of the retired personnel in case of their demise. |
Gratuity | Provides a lump-sum payment in army/ defence as a gratuity to the veterans upon retirement. |
Commutation | Allows the retired personnel to commute a portion of their defence/ army pension in exchange for a lump-sum payment in the army. |
Medical Benefits | Provides medical benefits to retired personnel and their dependents under the Ex-Servicemen Contributory Health Scheme (ECHS). |
Pension Revision | Offers periodic revision of pension to ensure that the pension amount keeps up with inflation |
Let us have a look at the major types of defence pension schemes from the table mentioned below:
Type of Defence Pension Scheme | Details |
Service Pension |
|
Family Pension/ Vidhwa Pension | In case of absence of the personnel due to natural death, a pension to their family is provided at:
|
Special Family/ Vidhwa Pension | In case of death of the personnel attributed to/ aggravated by the Military Service:
|
Liberalized Family/ Vidhwa Pension |
|
Disability Pension |
-Up to a maximum of 30% of last drawn emoluments if a complete disability -No disability element if the disability is less than 20%.
|
War Injury Pension | Pension of War Injury Element is provided in case of 100% disability:
|
Invalid Pension | The pension for invalided cases due to disability is Neither Attributable Nor Aggravated (NANA) type:
|
Reservist Pension | A pension is provided for:
|
*Note: The earlier criteria of a minimum of 10 years of service in the armed forces is not required from 16 July 2020.
The Indian Air Force, Navy, and Army pension rules under which the defence pension is provided are as follows:
Pension Regulations for the Army (PRA), 1961 [Revised PRA in 2008]
Pension Regulations for the Air Force, 1961
Navy (Pension) Regulation, 1964
Entitlement Rules for Casualty Pensionary Awards, 2008
The important documents required to join the Defence Pension Scheme are as follows:
Documents Required | Details |
ID Proof | Passport/ Aadhar Card/ Driving License |
Address Proof | Utility Bill/ Bank Statement/ Rent Agreement |
Service Records | PPO |
Bank Account Details | Bank Passbook/ Account Number/ IFSC Code/ Branch Name & Address |
Nomination Form | Nominees Details |
The Defence Pension Scheme in India offers various benefits to retired personnel of the Indian Armed Forces and their families. Some of the key benefits are:
The defence/army pension scheme provides a regular income to retired personnel, ensuring financial security and stability for the pensioner and their family.
The pension amount is adjusted periodically to account for inflation, ensuring it retains its purchasing power over time.
Under the Ex-Servicemen Contributory Health Scheme (ECHS), retired personnel and their dependents are eligible for various medical benefits, including medical facilities, hospitalization, and treatment expenses.
Retired personnel are eligible for various housing benefits, including allotment of houses, land, and loans for house construction, under various schemes, such as:
Armed Forces Flag Day Fund
Army Welfare Housing Organization (AWHO)
Navy and Air Force Housing Boards
Retired personnel are eligible for various travel concessions, including free rail/ air/ bus travel, under various schemes such as the Indian Railways, Air India, and State Transport Undertakings.
Retired personnel are eligible for various post-retirement benefits, including:
Canteen facilities
Educational assistance to children
Scholarships for higher education.
The Defence Pension Scheme is a vital support system for the armed forces personnel and their families. It provides financial security to the retired or deceased members of the defence forces and their dependents through various defence/ army pension schemes.
The defence/ army pension amount for a soldier in the Indian Armed Forces depends on several factors such as:
length of service
rank held
last pay drawn
The pension amount is calculated based on a percentage of the last pay drawn, and this percentage varies based on the rank and length of service.
Old Pension Scheme
Defence Pension= Average emoluments drawn in last 10 months of service × Percentage factor
Percentage Factor (PF): Determined by the relevant Pay Commission Recommendation and Pension Regulations
PF is determined based on the length of service and rank of the pensioner
New Pension Scheme: National Pension System (NPS)
Calculated based on the contributions made by the employee and the employer in the NPS, along with the investment returns generated by the pension fund
Investment Options: Equities/ Government Securities/ Corporate Bonds
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*All savings are provided by the insurer as per the IRDAI approved insurance
plan.
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
+Returns Since Inception of LIC Growth Fund
¶Long-term capital gains (LTCG) tax (12.5%) is exempted on annual premiums up to 2.5 lacs.
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^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.
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