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UPS Pension: What is Unified Pension Scheme? With which you will get more benefits in government job

UPS Pension: What is Unified Pension Scheme? With which you will get more benefits in government job
Ronit Kawale 0 Comments August 25, 2024


UPS vs OPS New Pension Scheme in Hindi: After criticism of the New Pension Scheme i.e. NPS, the government has approved a revised pension scheme on Saturday, August 24. This scheme is being called Unified Pension Scheme (UPS). This scheme will come into effect from the next financial year i.e. 1 April 2025. In this scheme, retired employees will get 50% of their salary as pension. This pension will be based on the average salary of the last 12 months. But for this the employee must have completed 25 years of service.

Some differences between UPS (new) and NPS (old) schemes

  • Pension is guaranteed under UPS. Those who have opted for NPS will be allowed to switch to UPS from next year.
  • On the other hand, NPS is a market-linked scheme in which your contribution is fixed but the returns depend on the market. Since the money in NPS is invested in the market, the pension amount is not fixed and keeps changing according to the market fluctuations.

Government contribution to pension increased

Government contribution to pension increased

Under NPS, the employee contributes 10 per cent of his/her basic salary, while the government contributes 14 per cent. In UPS, the government’s contribution has increased to 18.5%, while employees will continue to contribute 10 per cent of their basic salary and dearness allowance.

Employees contributing to NPS are eligible for a tax deduction of up to 10 per cent of their salary (basic + dearness allowance) under section 80 CCD (1), within the overall limit of ₹1.5 lakh under section 80 CCE.

Tax benefits in UPS are yet to be announced

Tax benefits in UPS are yet to be announced
  • In addition, one can claim an additional deduction of ₹50,000 under section 80 CCD(1B) over and above the limit of ₹1.5 lakh under section 80 CCE. Tax benefits under UPS are yet to be announced.
  • UPS is only for government employees who have opted for NPS, while private employees can also opt for NPS if their employer has opted for the contribution.
  • Any Indian citizen between the age of 18 and 70 years can voluntarily enroll in NPS.

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About the author

Ronit Kawale

Ronit Kawale is a seasoned professional with a diverse background in the financial sector and a current focus on web development and blogging. With prior experience at prestigious institutions such as Saraswat Bank and LIC of India, Ronit brings a wealth of knowledge in finance and administration to the table. Now, he's leveraging his expertise to bridge the gap between job seekers and government employment opportunities. Through his passion for web development and insightful blogging, Ronit aims to empower individuals with the information they need to navigate the world of government jobs effectively. Connect with him to stay updated on the latest job trends and insightful career advice.

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