How different the new pension system will be from NPS?

New Pension Scheme: The central government on saturday approved the Unified Pension Scheme. With the approval of this decision of the Union Cabinet, the years-old demand of lakhs of employees seems to be fulfilled. Under UPS, retired employees will be given 50 percent of the last salary as pension. The new pension system will be implemented from april 1, 2025. Explaining the decision, Information and Broadcasting minister Ashwini Vaishnaw said that the New Pension Scheme will also continue. Employees will have the freedom to choose any one of these two schemes. In such a situation, today we are going to tell you in detail about these two pension schemes.

Know what will be special in the Unified Pension Scheme

The narendra modi government at the Center has made a provision for assured pension in UPS. Assured Pension: In this, employees who have worked for 25 years will be able to get 50 percent of the average basic pay of the last 12 months of their service as pension.

Family Pension: If the employee dies during the job, then 60 percent of the employee's basic pay will be given to his family as family pension.

Minimum Pension: Minimum pension has also been arranged in UPS. Under this, people who have completed 10 years of service will be given a minimum pension of Rs 10,000.

Indexation Benefit: Under the new rules, the benefit of indexation benefit will also be available in pension, minimum pension and family pension.

Gratuity: After completing every 6 months of service, 1/10th of the salary and dearness allowance will be added to the gratuity. This payment will not reduce the amount of assured pension.

Know what is New Pension Scheme or National Pension System

National Pension Scheme is also known as New Pension Scheme. It was started in 2004. After this, in 2009, this scheme was also opened for the private sector. NPS is managed by Pension Fund Regulatory and Development Authority (PFRDA). In this, you get pension on the basis of investment. After withdrawing a small amount at the time of retirement, you can also take the remaining money as monthly income. With this, you keep getting an amount every month even after retirement. NPS is divided into Tier 1 and Tier 2 accounts. Those who choose Tier 1 account can withdraw some amount only at the time of retirement. However, Tier 2 account holders are allowed to withdraw some money before retirement.

According to Section 80 CCD of the Income Tax Act, one also gets the benefit of tax exemption on investment up to Rs 1.5 lakh. Also, there is no tax on withdrawal of 60 percent of NPS amount.