There is good news for government employees. The Finance Ministry has now given the same income tax benefits of the National Pension System (NPS) to the Unified Pension Scheme (UPS) as well. This means that central government employees who choose UPS instead of NPS will also get the same tax benefits. This announcement was made through a press release issued on July 4, 2025.
NPS Tax Benefits Now Available in UPS Too
As per the press release, “To support UPS more, the government has decided that the tax benefits given under NPS, with needed changes (Mutatis Mutandis), will also be given under UPS. These rules will match the NPS system and give good tax relief and help to employees who choose the Unified Pension Scheme (UPS).”
What This Means for Government Workers
This means that central government employees who choose UPS instead of NPS will now get the same tax benefits. But, since NPS and UPS are not the same, some changes will be made in the tax rules to match UPS.
What Is the Meaning of “Mutatis Mutandis”?
The Latin words Mutatis Mutandis mean “making needed changes without changing the main idea.” The Finance Ministry said these changes will keep UPS and NPS almost the same and give the same tax help to workers.
Why the Government Made This Rule
The government said this rule will help in making the retirement of central government workers more safe. The aim is to give clear, flexible, and tax-saving options to the employees.
From When UPS Is an Option?
The government said that from April 1, 2025, UPS will be an option for all new employees joining the Central Government Civil Services.
Last Date to Switch from NPS to UPS
The last date to switch from NPS to UPS has now been changed. Earlier, it was June 30, 2025, but now it is September 30, 2025. This is a one-time chance for current NPS employees to move to UPS.