Government employees get tax breaks on retirement funds
The Indian government recently rolled out a new tax amendment that gives central government employees bigger tax breaks on their retirement money through the Unified Pension Scheme (UPS).
The changes basically put UPS on par with the National Pension System (NPS).
How will this benefit employees?
If you're a UPS subscriber, up to 60% of your total retirement fund is now tax-free.
Plus, lump sum payouts based on how long you've worked—specifically, 10% of your monthly salary for every six months of service—are also exempt from income tax.
This move means more take-home money when you retire and less stress about taxes eating into your savings.
What is the Unified Pension Scheme?
Launched in April 2025, UPS was designed to give government workers more security and flexibility with their pensions.
With these new tax perks lined up with NPS benefits, there's finally a level playing field—and a little extra peace of mind about life after work.