The central government has given a big relief by making an important change in the Unified Pension Scheme (UPS). Now, employees who choose UPS will also get the same tax benefits and facilities that were earlier available only under the National Pension System (NPS).

Along with this, the last date to choose UPS has been extended from 30th June to 30th September 2025. This benefit will not only be given to current central government employees but also to retired employees and dependents (like spouses) of deceased employees.

What is the Unified Pension Scheme (UPS)?

The Unified Pension Scheme (UPS) is a new pension plan started by the central government. It began in April this year for new civil service employees. The main aim of this scheme is to give a fixed and sure pension after retirement. This is safer than the National Pension System (NPS), which depends on the market.

How Much Do Government and Employees Pay?

In the UPS, the government gives 18.5% of the employee’s basic salary and dearness allowance. The employee gives 10% from their own salary. UPS is called a defined benefit plan because it gives a fixed amount of pension after retirement. This amount does not change due to market ups and downs.

One-Time Option to Change from NPS to UPS

The central government has given a one-time chance to employees who are under NPS. If they want, they can change to UPS. But this choice can be made only once. Now, those who choose UPS will also get the same tax benefits that were earlier given only in NPS. This includes TDS exemption and other tax savings. Because of this rule, both schemes now have equal tax benefits, and employees can choose what suits them best.

New Last Date: 30 September 2025

The last date to choose UPS has been extended from 30 June to 30 September 2025. This gives more time to think and decide. This benefit is not only for current workers but also for retired employees and families (like spouses) of those who have died. But remember, this choice can be made only once.

Should You Choose UPS?

If you are a central government employee and want a safe and fixed pension after retirement, then UPS can be a good choice. But as this is a one-time option, make your decision carefully before 30 September 2025.