Has the government decided to announce huge reliefs for pensioners under the new regulations? There have been several important updates for the New Pension Scheme (NPS) and Old Pension Scheme (OPS) that come into effect in May 2025 and will, directly or indirectly, have effects on lakhs of employees and pensioners. The new guidelines issued by the Ministry of Finance are changing many rules regarding investment and returns concerning pension schemes. Let’s see in detail what amendments have been made with the new pension rules 2025 and what benefits it will hold for you.
Major Change In NPS
Under the New Pension Scheme (NPS), tax is exempted on 60% of the amount withdrawn after retirement. Earlier this exemption was there only for 40%, now the new rule has made it 60%. For example, if you were to withdraw Rs 50 lakh from the NPS, now Rs 30 lakh of that amount would be completely tax-free.
Discussion On Return Of OPS Continues
Many state governments have announced the return of the Old Pension Scheme (OPS), but the central government is still considering it. As of May 2025, the central government is contemplating coming up with a hybrid model instead of the full return of OPS, which will encompass benefits from both NPS and OPS. The final decision is expected by July 2025.
New Options For Investment In Pension Funds
Investors will now have increased flexibility under NPS. According to the new rules, you may invest a maximum of seventy-five percent of your pension fund in equities, whereas previously fifty percent of your pension fund was the maximum investment. In addition, we have new avenues for investing in government bonds and corporate debt so that you can extract better returns.
Proposal For Minimum Pension Guarantee
The government began a new proposal under NPS by guaranteeing a minimum pension of Rs 5,000 a month to all pensioners, irrespective of how small their investment was. This is especially beneficial to those employees with low salaries and who have invested a lesser amount into the NPS.
Will Pensioners Get Additional Benefits?
Under the new rules, pensioners can now expect an annual bonus along with dearness allowance (DA). The government is thereby mulling giving an annual additional bonus of Rs 10,000 to each pensioner aged 75 years and above.
Conclusion
If you are NPS investing or earn your pension, you must go through these new rules. The government may, of course, bring in further new changes, so do continue your updates from the pension fund or the bank.
Also Read: Old Pension Scheme: Will OPS Be Implemented Again, See Full Information