2. Hence, the benefit due was defined beforehand. (Representational image). Investment in NPS up to Rs 1.50 lakh is tax-deductible under Section 80C of the Income Tax Act, 1961. In view of the specific provisions of the Notification dated 22.12.2003, the date of advertisement for the vacancies or the date of examination for selection against those vacancies is not considered relevant for determining the eligibility for coverage under the Old Pension Scheme or the National Pension System. It further noted that the yearly contribution of the state government employees is in excess of Rs 2.5 lakh crore for this financial year. In 30 years, the cumulative pension bill of states has jumped to Rs 3,86,001 crore in 2020-21 from Rs 3,131 crore in 1990-91. So, the monthly payouts in case of an NPS are variable. These are listed below: All Indian citizens and NRIs can take up the NPS scheme. The attraction of the Old Pension Scheme or OPS called so since it existed before a new pension system came into effect for those joining government service from January 1, 2004 lay in its promise of an assured or defined benefit to the retiree. Under this scheme, the Government takes up the entire contribution towards the pension payouts. The contributions you make towards NPS are eligible for tax benefits under Section 80C, Section 80CCD (1B), and Section 80CCD (2). 248 On the other hand, the monthly pension you receive post-retirement with an OPS is fixed. 4. c) Only government employees are eligible under NPS. Do you agree? MoS Finance in LS said, The state governments of Rajasthan, Chhattisgarh, and Jharkhand have informed the Central government/PFRDA about their decision to restart old pension scheme (OPS) for their state government employees.. Check Business Breaking News Live on Zee Business Twitter and Facebook. The Old Pension Scheme for the government employees, except for defence personnel, was replaced with the New Pension Scheme (now called National Pension System) from January 1, 2004. 6. NPS operates as a market-linked annuity scheme, where individuals invest regularly during their employment years, and their contributions are combined into a pension. Voluntary Contribution: Deduction upto Rs.50,000 u/s 80 CCD(1B) from taxable income for additional contribution to NPS. The petitioners relied on a catena of cases such as Naveen Kumar Jha Vs. UOI & Ors. It further said that in terms of standard fiscal monitoring ratios, the pension liability/outgo of the state government is also increasing. The operative portion of the order reads as under: 12. These schemes govern the arrangement and delivery of pensions to retired employees. . The basic aim of these reforms was to transform the financial markets on free market principles. Only government employees are eligible for receiving a pension under the old pension scheme after retirement. Taking the 1991 Census numbers, the committee noted that just 3.4 crore people, or less than 11 per cent of the estimated total working population of 31.4 crore, had some post-retirement income security this could be government pension, Employees Provident Fund (EPF), or the Employee Pension Scheme (EPS). In fact, 56 per cent of expenditure of the states that is committed (interest payments, salary and pension payments) is met out of state revenue receipts. Suppose the performance of market-linked instruments in which your NPS is invested in, declines. 50% of the employees last months salary + Dearness Allowance + Pay Commission. A 4 per cent DA hike would mean that a retiree with a pension of Rs 5,000 a month would see her monthly income rise to Rs 5,200 a month. The full form of NPS is New Pension Scheme. He also relied on the State of U.P. v. Arvind Kumar Srivastava and Ors. But, OPS delivers you with the promised pension amount. After retirement, the pension payout is the sum of the employees last working months salary and some other allowances. s per the rule, 60 per cent of the corpus on maturity is tax-free, while the remaining 40 per cent is taxable and must be invested in annuities for a regular income or pension. It implies that government employees can receive their pension income without any deductions or tax obligations, providing them with financial security during retirement. ASG and the matter is sub-judice. Pension : Judgement of Supreme Court and Reversal from NPS to Old But, the situation is not that happy for the employees or subscribers. For reprint rights: Times Syndication Service. It enables them to receive regular pension annuities as a monthly pension. The total assets under management of all these subscribers stood at Rs 7,94,870 crore as on October 31, 2022. The government had then launched the NPS as a substitute for the old pension scheme. Explained: National Pension Scheme (NPS) vs Old Pension Scheme (OPS Here, we will discuss OPS vs NPS and explain their differences. [download id=97781 template=dlm-buttons-button], Filed Under: CGE Latest News, New Pension Schemes, Recent govt orders January 4, 2022, Central Government Employees News - Govtempdiary, Salary Hike Calculator for Government Employees, Central Government Office Holiday Calendar for 2024, Revised Charter for Financial Advisers: Enhancing Decision-Making in the Government, Merger of TC, CC, and ECRC Implications & Next Steps, Consolidation of Assistant Manager, MMS and Inspector Posts, Exclusion of Employees from EPF & MP Act, 1952. ANSWER THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (DR BHAGWAT KARAD) (a) to (c) As informed by Ministry of Home Affairs, reversal from National Pension System (NPS) to old pension scheme was allowed in WP (C) No. The annuity income is considered regular and taxed according to the individuals applicable income tax slab. But the two are different from each other. The pay-as-you-go scheme created inter-generational equity issues meaning the present generation had to bear the continuously rising burden of pensioners. Whether it is 40 years of job in OPS or 10 years, the amount of pension was decided by the last salary i.e. I suggest you to being a part of a huge family of 'The Indian Fever'. NPS VS OPS her the full comparison between National pension scheme (NPS) vs Old Pension Scheme (OPS). Variable. We go Beyond the issue to learn: Why there is need to reform Indias pension system? 2019 SCC OnLine Del 11891 to contend that it is a settled law that where an advertisement has been issued prior to 01.01.2004 but the successful candidates have been issued appointment letters subsequent to the NPS due to administrative delay on the part of respondents, then all such candidates must be given the benefit of OPS. The remaining 40% is then invested in annuities, financial products that provide a regular pension income. Shifting back to the old pension scheme will only further increase the burden on the state exchequer as per RBI, the total pension expenditure of all states put together stood at Rs 3.86 lakh crore in 2020-21 (BE). The petitioners were offered an appointment for the post of Assistant Commandant during the period October 2004 to 2005. Further, the OM dated 13th April, 2018, referred to hereinabove, does not recognize any such distinction for the purpose of deciding eligibility of personnel to the OPS. For other citizens, the minimum monthly contribution to NPS is 500. Two factors in the Old Pension Scheme (OPS full form) determine the pension amount. An SLP (C) No. On the other hand, you dont have to contribute anything into your OPS account, so no tax benefits there. Pension payouts are taxable as per your income slab. Pension is the monthly payout you receive after retirement to carry out your expenses. ASG and the matter is sub-judice. OPS vs NPS: Difference Between Old Pension Scheme and New - ClearTax In this context, merely obsessing over the nitty-gritty of OPS and NPS makes one miss the forest for the trees. In contrast, NPS is a Definitive Contribution Scheme, that is, the pension amount depends on the number of years the job has been done and the annuity amount. #oldpension#nps #ops #supremecourt #restoreoldpension #npsvsops #opswin#oldpensionscheme #youtubevideos #nps_employees_win_cases_in_Supreme_Court_on_restorat. Overall, pension payments by states eat away a quarter of their own tax revenues. NEW DELHI: With certain states opting to revert to the old pay-as-you-go (PAYG) pension scheme and some others deliberating upon it, a report by State Bank of India (SBI) economists on Thursday said that it is bound to increase the current expenditure of state governments. Often, they would receive far less than half of their salaries. Subscribe and click bell for instant notification of upcoming videos thank you..========================Subscribe Here: https://www.youtube.com/channel/UCcwpBjKuIJZDhvk1HQ9DXagWebsite: www.theindianfever.com========================Social media Links:don't be strange follow for the more instant updateFacebook: https://www.facebook.com/theindianfever/Twitter: https://twitter.com/theindianfeverInstagram: https://www.instagram.com/theindianfever/?hl=en========================thank you for watching keep loving and keep supporting 'The Indian Fever' channel. 2023. What is the Old Pension Scheme? If wages and salaries of state government employees are added to this bill, states are left with hardly anything from their own tax receipts. Old pension scheme latest news || NPS employees win cases in Supreme The employee doesnt need to pay anything into their OPS. National Pension System vs Old Pension System. (a) to (c) As informed by Ministry of Home Affairs, reversal from National Pension System (NPS) to old pension scheme was allowed in WP (C) No. Lastly, NPS investments help to save you a lot on your taxes. Only government employees are eligible for receiving a pension after retirement. Income under the old pension scheme doesnt attract tax. (TheUPSC EssentialsIndian Expressis now onTelegram. This will need to be brought down to manageable levels. In the case of NPS, you need to make a 10% contribution from your salary, but the government will also contribute the same 10%. The scheme requires you to make a 10% contribution every month and the government will contribute the same 10%. 173/2021 filed by the UOl/Department against the order was dismissed on 04.02.2021. 1. 4. Section 80DDB of Income Tax Act: Diseases Covered, Form, Certificate & Claiming Deductions, Section 194 TDS of Income Tax Act: Learn who it applies to & its impact on Section 115-O, Section 194N: TDS provisions for cash withdrawals above Rs. Copyright 20102022 All Rights Reserved | igecorner.com, Judgement of Supreme Court and Reversal from NPS to Old Pensions Scheme - Rajyasabha QA, 7th CPC Pay Matrix revised for Central Government Employees, 7th CPC Pay Matrix Table for Defence Personnel, Expected DA Calculator for Bank Employees from August 2023, Eligibility for coverage under the Old Pension Scheme or the National Pension System Rajya Sabha, Revision of Pension of retired Bank Employees [ Rajya Sabha QA ], CGEGIS Table of Benefits for the Saving fund from July to September 2021, GPF Interest Rate from July 2023 to September 2023, Central Government Offices Holiday List 2024: DOPT ORDER. NPS and OPS, both are retirement schemes to provide you with monthly pension. 756/2020 titled Dr. Davinder Singh Brar vide Order dated 28.01.2020. Its important to remember that this scheme is exclusively for government employees and differs from pension plans available in other industries. Explained: Old vs new pension schemes and why government staff are For Himachal, it is almost 80 per cent (pensions as a percentage of the states own tax revenues); for Punjab it is almost 35 per cent; for Chhattisgarh 24 per cent; and for Rajasthan 30 per cent. Vs. UOI & Ors. Explained: Why NPS is better than India's old pension scheme The court also observed that Article 246 read with List 1 Entry 2 of the VII Schedule of Constitution of India envisages Armed Forces of the Union of India includes Naval, Military and Air Forces; any other armed forces of the Union, so, the personnel of CAPFs deserve to get the benefit of OPS, as has been granted vide Notification dated 22.12.2003., Case title: Union of India & Ors v. Pawan Kumar & Ors, SPECIAL LEAVE PETITION (CIVIL) Diary No. The SBI report noted that the scheme was in vogue in most countries prior to 1990s. Old Pension Scheme (OPS) is the pension scheme that ran before the introduction of NPS. Under this, contributions of the current generation of workers was explicitly used to pay the pensions of pensioners. But, some major points of difference make the two schemes very different from one another. It implies that when the Dearness Allowance increases, the pension amount also increases, providing additional financial assistance to government employees. * Government must identify all cases of legacy contributions, not remitted to Trustee Bank and ensure its remittance with due interest and compensation to prevent loss to the subscriber. But, the employee doesnt need to contribute anything with an NPS, the government is responsible for that. Explained: Why NPS is better than India's old pension scheme - Times of India, IndiGo will double its fleet size by 2030: CEO Elbers, Largest-ever deal: IndiGo orders 500 Airbus A320 family aircraft worth $50 billion, Direct tax kitty swells 12.7% on robust advance mop-up, Terms of Use and Grievance Redressal Policy. This is because the pension payment depends on the corpus collected which in turn depends on the performance of the market-linked investments. function FeedBlitz_fa62f5dc7d0211e8bcad0019998b9bc4i(){var x=document.getElementsByName('FeedBlitz_fa62f5dc7d0211e8bcad0019998b9bc4');for(i=0;i