Integrated pension scheme In order to promote (UPS), the government has made necessary changes to give tax benefits to the employees who opt for this scheme like the National Pension System (NPS). The Finance Ministry said in a statement on Friday that the inclusion of UPS under tax structure is another step towards strengthening retirement security for central government employees through transparent, flexible and tax-skilled options. The ministry said, “The government has decided that the tax benefits available under NPS will also apply to UPS as it is an option under NPS.”
UPS was implemented as an option under NPS
These provisions ensure equality with the existing NPS structure and provide adequate tax relief and incentives to employees who opt for UPS. A notified of the Finance Ministry’s 24 January 2025 stated that since April 1, 2025, UPS was implemented as an alternative under NPS for employees admitted to the Central Government Civil Services. After this notification, government employees under NPS got a one -time option to join under UPS.
On August 24, 2024, UPS option was approved by Union Cabinet
To implement this structure, the Pension Fund Regulatory and Development Authority (PFRDA) notified on March 19, 2025 PFRDA (Operations of Integrated Pension Scheme under NPS) Regulations, 2025. UPS applies to the central government employees who come under the purview of NPS and choose this option under NPS. This option can be used by 23 lakh government employees. The Union Cabinet chaired by Prime Minister Narendra Modi approved the option of UPS on August 24, 2024. The NPS was brought for government employees after the Old Pension Scheme (OPS) was discontinued from January 2004.
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