NPS tax benefits to apply mutatis mutandis to Unified Pension Scheme
On 4 July 2025, the Finance Ministry said tax benefits available under the National Pension System will apply mutatis mutandis to the Unified Pension Scheme, as UPS is an option under NPS.
Summary
The Ministry of Finance announced on 4 July 2025 that tax benefits available under the National Pension System (NPS) will apply mutatis mutandis to the Unified Pension Scheme (UPS), as UPS is an option under NPS, ensuring parity and tax relief for employees who opt for it. The Department of Financial Services had notified UPS on 24 January 2025 as an option under NPS for Central Government civil service recruits with effect from 1 April 2025, and the PFRDA notified the PFRDA (Operationalisation of the Unified Pension Scheme under NPS) Regulations, 2025 on 19 March 2025 (static).
Key facts
- Decision
- NPS tax benefits apply mutatis mutandis to UPS
- UPS (static)
- Notified 24 January 2025 by DFS; option under NPS for Central Government employees; effective 1 April 2025
- Regulations (static)
- PFRDA (Operationalisation of UPS under NPS) Regulations, 2025 — notified 19 March 2025
Practice MCQs 3 questions
With effect from which date was the Unified Pension Scheme introduced as an option under NPS for Central Government civil service recruits?
Show answer
Correct answer: D — 1 April 2025
Ministry of Finance: DFS Notification dated 24.01.2025 introduced UPS as an option under NPS with effect from 1 April 2025 (01.04.2025).
Which body notified the regulations for operationalising the Unified Pension Scheme under NPS in March 2025?
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Correct answer: B — Pension Fund Regulatory and Development Authority
Ministry of Finance: the Pension Fund Regulatory and Development Authority (PFRDA) notified the PFRDA (Operationalisation of the Unified Pension Scheme under NPS) Regulations, 2025 on 19 March 2025.
Why did the Government say NPS tax benefits apply mutatis mutandis to UPS (July 2025)?
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Correct answer: A — Because UPS is an option under NPS
Ministry of Finance: the Government decided that tax benefits as available under NPS shall apply mutatis mutandis to UPS as it is an option under NPS.