A big change in pension rules from 1 April 2024, know new guidelines! Pension New Rules and Changes 2025 – StudyToper

Changes are made from time to time in pension related rules to make it more transparent and user friendly. From 1 April 2024, some significant changes in pension schemes in India and other countries are going to implement. These changes will affect not only government employees but private sector employees and all persons investing in pension schemes. In this article, we will discuss these new rules and their effects in detail.

Main changes: new form of pension rules

The four major changes given below will be implemented under pension schemes:

1. Lifetime Allowance (LTA) elimination

• Lifetime Allowance (LTA), which until now set the maximum limit of pension savings, would be terminated from 6 April 2024.
• Two new boundaries will apply in its place:
  • LSA (Lifetime Savings Allowance): This limit will only apply to tax-free pension savings.
  • LSDBA (Lifetime Savings Death Benefit Allowance): This limit will apply to the benefits received after death.
• This will give more flexibility to pensioners and will also get additional tax benefits.

2. Changes in NPS (National Pension System)

• Now 60% of the total corpus can be tax-free under NPS.
• The remaining 40% will be used to purchase an annuity plan compulsorily.
• Earlier only 40% of Corpus used to be tax-free, but now it has increased to 60%.
• In addition, the equity limit of investment in NPS has been maintained up to 75%, which will give investors the opportunity for higher returns.

3. Extension of digital process

• The pension process for government employees will be made completely online.
• Now all forms such as Form 6-A have to be submitted through digital platforms like Bhavishya or E-HRMS.
• This process will not only save time but will also make it more transparent.

4. Unified Pension Scheme (UPS) launched

• The central government has introduced a new scheme, Unified Pension Scheme (UPS).
• In this, employees will be given 50% of their last 12 months average basic salary as pension.
• Minimum service period:
  • Employees with 25 years or more services will get full benefit.
  • Employees with 10 to 25 years of service will be provided propour pension.
• Apart from this, family pension is also guaranteed, which will be given to his family after the employee’s death.

Summary of pension scheme

Other important aspects

Suggestions for pensioners

1. Adopt digital process: Submit all forms on time and correctly online.
2. Take care of tax benefits: Take full advantage of tax exemption while investing in schemes like NPS and UPS.
3. Plan long -term: Select equity -based investment options so that high returns can be obtained.

New rules for family pension

• If the employee dies, the family will get 60% of his final salary as family pension.
• If a family member is not eligible, the nominee can receive gratuity.

Compulsion of annuity plans

• The remaining corpus extracted under NPS will have to be used to purchase an annuity plan.
• This will ensure that regular income remains after retirement.

potential impact

These new rules are likely to benefit the following benefits:

• Simplicity: Digital process and simple formats will make work easier.
• Financial security: Improvements like UPS and NPS will provide better financial security to employees.
• Tax Savings: Investors will get a chance to save more with the new tax benefits rules.

However, there may also be some challenges such as technical problems in the digital process or difficulty in understanding new policies.

conclusion

These new rules, which come into force from 1 April 2024, are a major step for pensioners. These will not only simplify existing processes but will also provide financial security.

Disclaimer:

This article is written only for the purpose of providing information. Please seek specialist advice before taking any financial decision. The above schemes and rules are real and have been declared by the government.