Overview

• All major NPS tax deductions—Sections 80CCD(1), 80CCD(1B) and 80CCD(2)—will now apply mutatis mutandis to Unified Pension Scheme subscribers, the finance ministry confirmed on July 4.
• Launched on April 1 as an option under NPS, UPS restores defined-benefit features including a guaranteed pension equal to 50 percent of average last-drawn pay, assured family pension and inflation indexation.
• Gratuity provisions under the old pension scheme have also been extended to UPS enrollees following PFRDA’s operational regulations update issued in June.
• Uptake remains low with only about 1 percent of the 2.7 million eligible central government employees switching to UPS despite successive incentives.
• The government has extended the one-time opt-in window for NPS subscribers to September 30, 2025, in an effort to boost adoption among eligible employees.