The Modi government has made another big announcement for central government employees. Now, all the tax benefits available under the National Pension System (NPS) will also be given under the Unified Pension Scheme (UPS). With this move, the government aims to make the UPS more attractive for central employees.
UPS is Another Option Like NPS
The government started the Unified Pension Scheme (UPS) for central government employees from April 1, 2025. It is a new option along with the National Pension System (NPS). Employees who are already in NPS can choose to shift to UPS, but it is not compulsory.
What the Government Said
The Finance Ministry said that employees who choose UPS will get the same tax benefits as those in NPS. This means they can save tax in the same way. The government wants both pension schemes to give equal benefits so that employees can choose what is better for them.
Main Features of UPS
- UPS gives a fixed pension after retirement.
- In UPS, the government gives 18.5% of the basic salary and DA.
- The employee gives 10% of their salary.
- UPS is made for new employees, and current employees can also switch to it.
- NPS gives returns based on the market. It is not fixed.
More Time to Choose UPS
The government has given more time to choose UPS. Now, employees can choose till 30 September 2025. Before, the last date was 30 June 2025. This extra time will help employees, retired staff, and family members of retired employees to make better decisions.