The Finance Ministry said in a statement on Friday that the inclusion of UPS under the tax structure is another step by the government towards strengthening retirement security for central government employees through transparent, flexible and tax-efficient 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 parity with the existing NPS structure and provide adequate tax relief and incentives to employees opting for UPS. A notification of the Finance Ministry dated January 24, 2025 stated that UPS was implemented as an option under NPS for employees recruited in the civil services of the Central Government from April 1, 2025. After this notification, government employees covered under NPS got a one-time option to join under UPS.
The UPS option was approved by the Union Cabinet on August 24, 2024
To implement this framework, the Pension Fund Regulatory and Development Authority (PFRDA) notified the PFRDA (Operation of Integrated Pension Scheme under NPS) Regulations, 2025 on March 19, 2025. UPS applies to those 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 headed by Prime Minister Narendra Modi approved the introduction of the UPS option on August 24, 2024. NPS was introduced for government employees after the Old Pension Scheme (OPS) was discontinued from January 2004.
ITR Filing 2025 : These 10 problems may arise while filing ITR, keep these things in mind
