Agniveer Seva Nidhi Package After 4 Years

When you complete the four-year Agnipath engagement, you receive a one-time lump sum called the Seva Nidhi, drawn from the Agniveer Corpus Fund. The commonly cited tax-free amount is about Rs 11.71 lakh, inclusive of accrued interest. This guide explains how that corpus is built, why it is exempt from income tax, and what Section 80CCH lets you deduct while you serve. It also covers regular-cadre selection, early exit, and death or disability during service.

On finishing 4 years of service, an Agniveer gets the Seva Nidhi as a single tax-free payout. It is built from roughly Rs 5.02 lakh of your own contribution plus a matching Rs 5.02 lakh from the government (about Rs 10.04 lakh of contributions), and rises to around Rs 11.71 lakh once accrued interest is added. The payout is exempt under Section 10(12C). Your monthly package grows from Rs 30,000 in the first year to Rs 40,000 in the fourth, and 30% of it goes to the corpus every month. On a regular-cadre selection the payout is your own contribution with interest only.

The Seva Nidhi is the exit package paid from the Agniveer Corpus Fund on discharge. The law defines the fund as a fund holding consolidated contributions of all the Agniveers, matching contributions of the Central Government, and interest on both. Every month, 30% of your monthly package goes into your Corpus Fund, the government adds an equal amount, and the combined balance plus interest is paid to you when your 4-year term ends. It is not a pension, and no gratuity accrues for the four years.

The Agnipath Scheme was launched in 2022 for enrolment into the Indian Armed Forces on a four-year engagement. The Union Cabinet approved it on 14 June 2022, rallies were to commence within 90 days, and 46,000 Agniveers were to be recruited that year. For tax purposes the law identifies the scheme through a Ministry of Defence letter dated 29 December 2022, and applies the corpus-fund rules to those subscribing on or after 1 November 2022.

The build-up works like this:

1. ① Each month, 30% of your monthly package is compulsorily deposited in your Agniveer Corpus Fund.
2. ② The Central Government contributes an equal (matching) amount to the same fund.
3. ③ The combined balance earns interest over the 4 years, and that interest is paid with the corpus.
4. ④ At the end of 4 years, the accumulated balance is released to you as the Seva Nidhi.

The monthly figures announced with the scheme are:

Over the full term, your own contribution adds up to roughly Rs 5.02 lakh and the government match adds another Rs 5.02 lakh, for about Rs 10.04 lakh in contributions. With accrued interest, the commonly cited lump sum is around Rs 11.71 lakh, inclusive of interest, not in addition to it.

The package is composite: it does not attract Dearness Allowance or Military Service Pay, though Risk and Hardship, ration, dress and travel allowances apply. Agniveers are exempt from contributing to any provident fund, because the corpus replaces that saving.

The Seva Nidhi you receive from the Agniveer Corpus Fund on completing service is exempt from income tax under Section 10(12C) of the Income-tax Act, 1961. The clause was inserted by the Finance Act, 2023 and exempts any payment from the Agniveer Corpus Fund to a person enrolled under the Agnipath Scheme, or to his nominee. The exemption covers your own contribution, the government's contribution, and the interest, so the full lump sum reaches you tax-free, and amounts paid to your family on death fall under the same clause. The scheme announcement had promised exactly this: “The 'Seva Nidhi' will be exempt from Income Tax.”

From 1 April 2026 the Income-tax Act, 2025 replaces the 1961 Act and keeps the structure: its section 125 allows the whole-amount deduction, and its Schedule II exempt-income table carries an Agniveer Corpus Fund entry at serial number 7 with the same definitions.

While you are serving, your contributions to the Corpus Fund are addressed by Section 80CCH, also inserted by the Finance Act, 2023. The section allows a deduction of the whole amount, in two parts:

• Your own contribution: the whole of the amount paid or deposited to the fund, for those subscribing on or after 1 November 2022.
• The Central Government's contribution: the whole of the amount contributed, which is also counted as part of your salary.

There is no upper monetary limit on either part, but the tax regime decides what you can claim:

• Your own contribution is deductible only under the old tax regime. The default new regime under section 115BAC bars Chapter VI-A deductions except a short list, and that list names only the government-contribution part of Section 80CCH, not your own.
• The Central Government's contribution is deductible under both the old and the new tax regime.

Because the new regime is now the default, most Agniveers get the deduction only for the government's share. The e-filing portal lists Section 80CCH under Chapter VI-A with the whole-amount rule for both parts. If your income is below the taxable threshold the deduction may not change your liability, but understand it before you file.

The Agnipath Scheme is a fixed four-year engagement, so for that period:

• You do not receive gratuity.
• You do not receive pensionary benefits for the 4-year term.
• You are not eligible for Ex Servicemen Contributory Health Scheme, Canteen Stores Department facilities, or Ex Serviceman status after discharge.
• You are not eligible for Army Group Insurance Fund schemes or benefits.

Alongside the corpus you get non-contributory life insurance cover of Rs 48 lakh for the duration of the engagement, and medical treatment at military hospitals with CSD provisions during the four years, though not after discharge. Services may be terminated at any time under the Army Act 1950.

If you are selected for the regular cadre. Up to about 25% of each batch may be enrolled into the regular cadre, based on organisational requirement and objective criteria including performance. Selection is the exclusive jurisdiction of the service. Those selected serve a further engagement period of 15 years under the regular terms, including the pension rules of that cadre. One financial consequence is easy to miss: on such selection the Seva Nidhi comprises only your own contribution with accrued interest, and the government's matching share is not paid.

If you exit early on your own request. Release before four years is generally not permitted, though a competent authority may sanction it in most exceptional cases. If sanctioned, your accumulated Seva Nidhi is paid with interest, and no government contribution is paid.

How the money is paid. The Army terms provide two options to receive the Seva Nidhi, aimed at enabling self-employment loans through a bank guarantee and meeting immediate expenses on exit, with firm details promulgated separately. On a normal exit you also receive a detailed Agniveer skill certificate and, if you were enrolled after Class 10, a Class 12 equivalent certificate.

If death or disability strikes during service. Agniveers are not governed by the Pension Regulations for Army, but the terms set compensation:

Disability extent is computed in bands: 20% to 49% is reckoned as 50%, 50% to 75% as 75%, and 76% to 100% as 100%.

Consider an Agniveer who enrolled in late 2022. In the first year Rs 9,000 of his Rs 30,000 package goes to the corpus and Rs 21,000 reaches him in hand, with the government matching Rs 9,000. By the fourth year the package is Rs 40,000, with Rs 12,000 to the corpus and Rs 28,000 in hand. Near the end of his term around late 2026 his corpus holds roughly Rs 10.04 lakh in contributions, expected to reach about Rs 11.71 lakh with interest. He receives that as a single tax-free payout, unless selected for the regular cadre, when only his own contribution with interest is paid.

Your Corpus Fund is maintained by the designated Accounts Officer under the Controller General of Defence Accounts. To track it:

1. Check your monthly pay statement, which shows the Corpus Fund deduction.
2. Ask your unit's accounts office for your Corpus Fund statement.
3. If a balance or payout detail is not provided, file an application with the relevant office. For how to draft and follow up such a request, see The RTI Playbook.

• Treating Rs 11.71 lakh and Rs 10.04 lakh as separate amounts. The former already includes interest on the latter.
• Assuming you can deduct your own contribution under the new regime. Only the government's contribution part of Section 80CCH is deductible there.
• Expecting a pension after 4 years. Only regular-cadre selections come under pension rules. The engagement itself carries none.
• Believing the payout is taxable. Section 10(12C) exempts the entire Seva Nidhi.
• Expecting the government match on a regular-cadre selection. The payout is then your own contribution with interest only.

It is commonly cited as about Rs 11.71 lakh, a single lump sum on completing the four years, inclusive of accrued interest on roughly Rs 10.04 lakh of contributions.

No. The payout from the Agniveer Corpus Fund on completion of service is exempt under Section 10(12C), including your contribution, the government's contribution, and the interest. Payments to your nominee on death are covered by the same clause.

Under Section 80CCH, your own contribution is deductible only under the old tax regime. The government's contribution to your account is deductible under both the old and the new regime, with no upper limit.

No. The four-year engagement does not carry gratuity or pensionary benefits. Up to about 25% of a batch may later be selected for the regular cadre, where the applicable pension rules then apply.

The scheme was approved on 14 June 2022, rallies were to commence within 90 days, and 46,000 Agniveers were to be recruited that year. The first four-year engagements therefore complete from around late 2026.

The Seva Nidhi package paid to you at that point comprises only your own contribution with accrued interest. The government's matching contribution is not paid in that case, per the Indian Army terms.

At minimum the Rs 48 lakh insurance cover and the fund balance with interest and government contribution. Where the death is on bonafide duty in the attributable or aggravated categories, the family also gets Rs 44 lakh ex gratia and full pay for the unserved period up to four years including the Seva Nidhi component.

• The RTI Playbook
• Pension options: old pension scheme vs NPS
• Why your salary looks lower: hidden deductions
• How to respond to an income tax notice
• Income tax guides hub

• Press Information Bureau, Cabinet approval of the AGNIPATH scheme, 14 June 2022, PRID 1833765
• Indian Army, Terms and Conditions, Agnipath Scheme for service in Indian Army, June 2022, joinindianarmy.nic.in
• Finance Act, 2023 (Section 10(12C) and Section 80CCH), indiankanoon.org
• Income-tax Act, 2025 (section 125 and Schedule II), indiankanoon.org
• Income-tax e-filing portal, deductions guidance for salaried individuals, incometax.gov.in

Last reviewed: 12 September 2026.