Early Times Report
New Delhi, July 4: In a bid to promote Unified Pension Scheme, the government has made necessary changes to provide tax benefits to employees opting for UPS at par with those under National Pension System (NPS).
The inclusion of UPS under the tax framework marks another step forward in the government’s effort to strengthen retirement security for central government employees through transparent, flexible and tax-efficient options, the finance ministry said in a statement.
“The government has decided that tax benefits as available under NPS would apply mutatis mutandis to UPS as it is an option under NPS,” it said.
These provisions ensure parity with the existing NPS structure and provide substantial tax relief and incentives to employees opting for the UPS.
The finance ministry through a notification dated January 24, 2025 had notified introduction of the UPS as an option under NPS for the recruits to the central government civil service with effect from April 1, 2025, giving one-time option to the employees covered under NPS for inclusion under the UPS.
To operationalise this framework, the Pension Fund Regulatory and Development Authority (PFRDA) notified the PFRDA (Operationalisation of the Unified Pension Scheme under NPS) Regulations, 2025 on 19th March 2025, it said.
UPS is applicable to the central government employees who are covered under the NPS and who choose this option under the NPS, which came into effect on January 1, 2004.
The option can be exercised by 23 lakh government employees.
On August 24, 2024, the Union Cabinet, chaired by Prime Minister Narendra Modi approved the UPS.
Under the old pension scheme (OPS) which has been discontinued since January 2004, employees used to get 50 per cent of their last drawn basic pay as pension. |
