The inclusion of UPS under the tax framework marks another step forward in the government’s effort to strengthen retirement security for central government employees through transparent, flexible and tax-efficient options, the finance ministry said in a statement
New Delhi: In a bid to promote Unified Pension Scheme, the government has made necessary changes to provide tax benefits to employees opting for UPS at par with those under National Pension System (NPS).
These provisions ensure parity with the existing NPS structure and provide substantial tax relief and incentives to employees opting for the UPS.
The inclusion of UPS under the tax framework marks another step forward in the government’s effort to strengthen retirement security for central government employees through transparent, flexible and tax-efficient options, the finance ministry said in a statement.
“The government has decided that tax benefits as available under NPS would apply mutatis mutandis to UPS as it is an option under NPS,” it said.
The Department of Financial Services had notified introduction of the UPS as an option under NPS for the recruits to the Central Government civil service with effect from Apr giving one-time option to the central government employees covered under the NPS for inclusion under the UPS.
To operationalise this framework, the Pension Fund Regulatory and Development Authority (PFRDA) notified the PFRDA (Operationalisation of the Unified Pension Scheme under NPS) Regulations, 2025 on 19th March 2025.