The pension amount received in OPS is fixed. As much as the last salary was received, 50% of it will continue to be received in the form of pension. But the pension of NPS can increase or decrease. Since NPS is market linked, fluctuations are common.
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The demand for the old pension scheme ie OPS has intensified. Here ops Means Old Pension Scheme. This system has been implemented in some states, especially in anti-Bharatiya Janata Party states. To be implemented in Punjab and in Gujarat also it has been made an election issue. The government had started the National Pension Scheme i.e. NPS by closing the OPS. NPS There is a new pension scheme which has been made an issue by the opposition parties. Politics has also heated up on this issue. Be it NPS or OPS, both are retirement schemes in which the subscriber has to deposit money continuously. Unlike OPS, market linked investments in NPS involve money and the return is given to the pensioner. Apart from this, there are other fundamental differences that separate the two. Let us know about both.
Difference between OPS and NPS
- How much pension is received: Under NPS, employees keep depositing money during their job. This deposited money is invested in market linked securities. In contrast, OPS gives pension to the government employee on the basis of his last salary. Under OPS, 50 percent of the employee’s last salary is given as pension.
- Tax advantage: Under section 80C in NPS, there is a facility of tax exemption up to Rs 1.5 lakh on annual investment. Apart from this, an additional exemption of up to Rs 50,000 can be availed under section 80CCD(1B). On the other hand, there is no provision of any tax exemption in OPS.
- Amount of Pension: On retirement, 60% of NPS corpus can be redeemed which is tax free. The remaining 40 percent is deposited in the annuity of life insurance companies. The money invested in annuity is taxed. Any income earned from OPS such as interest is not taxable.
- Qualification: Every citizen of 18 to 65 years can avail the benefit of NPS. OPS is only and only for government employees.
who is better of the two
The pension amount received in OPS is fixed. As much as the last salary was received, 50% of it will continue to be received in the form of pension. But the pension of NPS can increase or decrease. Since NPS is market linked, fluctuations are common. NPS does not guarantee returns. The biggest feature of NPS is that money is invested in market linked securities, due to which the money of NPS increases. But it also has risks.
Hence, NPS is better for those who are risk-averse and want to earn big money in future. NPS is also good for retirement because you can save up to Rs 2 lakh in tax on your investments in a year. Such facility is not available in the old pension system.