UPS Benefits- Good news for central government employees. The central government has taken a big and relief decision in the interest of central employees. Now the employees choosing the Unified Pension Scheme (UPS) will also get the same tax benefits which were till now available only under NPS.

The government has now extended the deadline for choosing this option from June 30 to September 30, 2025. This extension has been given to existing employees as well as retired employees and spouses of deceased pensioners. This move of the Finance Ministry will make the Unified Pension Scheme even better for central government employees.

The aim of the scheme

It is worth noting that earlier this year, from April 1, 2025, the Unified Pension Scheme was introduced as an option under NPS for those joining the civil services of the Central Government. Under UPS, the Central Government contributes 18.5% of the basic salary and dearness allowance of the employee. At the same time, the employee has to contribute 10%. The purpose of this scheme is to provide assured pension to government employees after retirement. Which is considered to be more stable and traditional benefit based than NPS.

Opportunity to switch from NPS to UPS

Central government employees currently covered under NPS have been given a one-time option to switch to UPS. However, this switch is not mandatory but voluntary. According to the Finance Ministry, employees opting for UPS will now also get TDS exemption and all other tax benefits which were being given only under NPS till now. This decision establishes parity between the two pension schemes.

What is important for employees to know If you are under NPS and want to switch to UPS, then this opportunity will be available only once. It is mandatory to choose your option by September 30, 2025. UPS is a fixed pension scheme, in which the government makes a higher contribution.

Now the same tax exemption will be available on UPS as is available on NPS. This step of the central government has brought special relief to those employees who are looking for more stability and assured pension after retirement. Now employees will get more time and option to take a well-thought-out decision.