Central Government Employees Latest News

8th Pay Commission Latest News Today, Pay Matrix, Expected DA Rates Table

You are here: Home / NPS to OPS / NPS Govt Contribution Rate 14% of Basic Pay + DA
Latest 8th CPC News
Salary Calculator Updated 2025
DA July 2025 Calculator
New HRA Rates 2025
New Transport Allowance Rates
CG First Pay Calculator

NPS Govt Contribution Rate 14% of Basic Pay + DA

June 15, 2023 Ekanathan 2 Comments

NPS Govt Contribution Rate: 14% of Basic + DA

The Central Government has increased the mandatory contribution by Central Government from 10% to 14% of the basic pay+DA for all the Central Government employees covered under National Pension System Tier-I with effect from 1.4.2019.

Table of Contents
Modifications in New Pension Scheme
NPS Vs OPS
What is the Old Pension Scheme?
What is the New Pension Scheme (NPS)?

Enhancement of the Government’s contribution from the earlier 10% of Pay + DA to 14% of Pay + DA

The National Pension System (NPS) is a mandatory provision for all Central Government employees (excluding those in the Armed Forces) recruited on or after 1 January 2004. Subsequently, all State Governments except West Bengal have implemented the NPS for their employees as well. Government personnel contributes 10% of their salary each month and the Government provides a corresponding amount. The employer’s contribution rate for Central Government employees has been increased to 14% as of 1 April 2019. View More

Modifications in New Pension Scheme

The Government of India has implemented a variety of reforms to ensure the safety of National Pension System (NPS) subscribers. These reforms include increasing the government’s contribution from 10% to 14% of pay and dearness allowance (DA), offering freedom of choice when selecting pension funds and patterns of investment, providing compensation for non-payment or delayed payment of contributions during 2004-2012, offering tax exemption under the Income Tax Act, 1961 Section 80C, and raising the tax exemption limit for lump-sum withdrawals up to 60%, thereby making the withdrawal exempt from income tax.

NPS Vs OPS

One of the main demands of Central Government staff is to terminate the National Pension System and put in place the Old Pension Scheme!

The National Pension Scheme substituted the old pension system with effect from April 1, 2004 for all Central Government employees. Under the earlier system of pension in the Central Govt, retirees got a monthly pension amount that was equivalent to 50% of their last drawn basic salary. In comparison, NPS involves a contributive pension system wherein employees contribute 10% of their salary (basic pay plus dearness allowance) and the government adds 14% to the employees’ NPS accounts.

The funds in the NPS are managed by authorized pension fund managers who are approved by the Pension Fund Regulatory and Development Authority. It is the responsibility of the employee to purchase an annuity plan from authorized pension suppliers. On retirement, the employee must buy an annuity plan which will grant a minimum of 40% of the accumulated corpus as a monthly pension. The remaining amount can be withdrawn as a single lump sum.

What is the Old Pension Scheme?

OPS is a retirement scheme approved by the government, which offers a monthly pension to the recipients until the end of their service life. The monthly pension amount is equal to half of the last salary earned by the individual.

What is the New Pension Scheme (NPS)?

It is a retirement plan that provides holders the option to access 60% of their investment after retirement. This plan was initiated by the Indian government in 2004. The left-over 40% must be put into annuities to get a regular pension. Only government staff members can switch back to the advantages of the Old Pension system in case of the employee’s passing or disability. Let us observe some of the distinctions between the old pension system and the new pension system.

NPS To OPS

What is the NPS Govt Contribution Rate?

The NPS Govt Contribution Rate is 14% of the Basic Pay plus Dearness Allowance (DA).

Who determines the NPS Govt Contribution Rate?

The NPS Govt Contribution Rate is determined by the government.

What does the NPS Govt Contribution Rate include?

The NPS Govt Contribution Rate includes 14% of the employee’s Basic Pay and Dearness Allowance.

How is the NPS Govt Contribution calculated?

The NPS Govt Contribution is calculated by adding 14% of the employee’s Basic Pay and Dearness Allowance.

Is the NPS Govt Contribution mandatory?

Yes, the NPS Govt Contribution is mandatory for government employees.

Are there any exceptions to the NPS Govt Contribution Rate?

No, all government employees are eligible for the 14% NPS Govt Contribution Rate.

Is the NPS Govt Contribution taxable?

No, the NPS Govt Contribution is not taxable for the employee.

Can government employees contribute more than the NPS Govt Contribution Rate?

Yes, government employees can choose to contribute more than the NPS Govt Contribution Rate if they wish to do so.

How does the NPS Govt Contribution affect retirement savings?

The NPS Govt Contribution helps in building retirement savings for government employees, as it is an additional contribution towards their National Pension Scheme (NPS) account.

Can government employees opt-out of the NPS Govt Contribution?

No, government employees cannot opt-out of the NPS Govt Contribution.

No related posts.

Filed Under: NPS to OPS

Comments

  1. PRABHAHARAN MARIAPPAN says

    February 12, 2023 at 8:11 am

    This to request you to correct the mistake in the information provided regarding calculation of Pension in Old Pension Scheme. Pension was calculated at 50% of the last drawn basic pay if the employee has completed 30 years of qualifying service. Pension was reduced proportionate to the service below 30 years. DA was not taken into consideration for calculating pension. But DA given at the existing percentage on the basic pension.

    Reply
    • admin says

      February 12, 2023 at 11:35 am

      Thank You, sir!

      Reply

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Online Calculators

  • 7th Pay Commission Salary Calculator January 2025 (55% DA Updated)
  • Expected DA from July 2025 Calculator
  • Pay Scale Conversion Calculator
  • 7th CPC Increment Calculator 2025
  • KVS PGT, TGT, PRT Teacher Salary Calculator 2025
  • Bonus Calculator for CG Employees 2025
  • CGEGIS Savings Fund Benefit Calculator Updated 2025
  • Central Government First Pay Calculator 2025
  • Retirement Date Calculator for CG Employees
  • DA Arrears Calculator January 2025 (55% Updated)
  • Commutation Factor Value of Pension Calculator
  • Leave Encashment of CG Employees Calculator
  • HRA Income Tax Exemption Calculator for Salaried Employees
  • 7th CPC Pension and Arrears Calculator
  • Fixation of Pay on Promotion Calculator as per FR 22(I)(a)(1)
  • 7th CPC Pay Calculator for Teachers in Universities and Colleges
  • 18 Months DA Arrears Calculator for CG Employees
  • 18 Months DA Arrears Calculator for CG Pensioners
  • 7th CPC TA & DA Calculator
  • Government Pension Calculator 2025
  • CPSE (IDA Pay Scale) Salary Calculator
  • DA Amount Calculator Online 2024
  • Dearness Relief (DR) Calculator for Pensioners
  • Expected January 2024 IDA Calculator for BSNL Employees
  • Expected IDA Calculator from April 2024 for CPSE Employees
  • GPF Interest Rate Calculator
  • HRA Online Calculator
  • LTC Cash Voucher Scheme Calculator
  • Option Calculator for Promotion or MACP to Switch over to 7th CPC
  • OROP Arrears Calculator for Defence Pensioners
  • Simple Online New & Old Regime Income Tax Calculator

State Govt Calculators

  • Maharashtra Govt 7th Pay Commission Calculator
  • Karnataka Pension and Family Pension Calculator
  • Option for Fixation Calculator for Tamil Nadu Govt Employees
  • Pay Calculator for Jammu & Kashmir Govt Employees
  • Pay Scale Calculator for Karnataka Govt Employees
  • Rajasthan Employees Pay Matrix Calculator
  • Tamil Nadu Govt Employees Pay Calculator
  • WB 6th Pay Commission Revised Pay Calculator

Top Pages

  • Pay Matrix Table for Central Government Employees
  • 7th CPC DA Calculation Table 2016 to 2025
  • DA Rates Table 2025 | Current DA Rate 53%
  • CSD Price List 2025: Car, Bike, Scooter, AC, TV, WM and Fridge
  • Kendriya Vidyalaya Fee Structure 2025-26
  • Kendriya Vidyalaya Balvatika School Admission Form 2025-26
  • 7th CPC Briefcase Allowance 2025

8th Pay Commission News

  • Latest 8th Pay Commission News Date, Salary Slab, Pay Scale Calculator
  • Expected 8th Pay Commission Pay Matrix Table

Latest Discussions

  • M K KUMAR on 7th CPC MACP Scheme | Latest Clarification on MACP Scheme
  • M K KUMAR on 7th CPC MACP Scheme | Latest Clarification on MACP Scheme
  • Md F Akhtar on 7th CPC MACP Scheme | Latest Clarification on MACP Scheme
  • A V Nayak on AMA Doctor List for Central Government Employees
  • Mandi B on Examples of Calculation of Pension/Family Pension as per OM issued on 12.5.2017 by Pensioners Portal
  • Mandi B on Examples of Calculation of Pension/Family Pension as per OM issued on 12.5.2017 by Pensioners Portal
  • M K KUMAR on 7th CPC MACP Pay Fixation on Promotion MACP Calculator 2025
  • RAJESH KUMAR SINGH on CGHS Ranchi Approved Hospital List
  • S.A.Alisha on FR & SR Rules – What says Rules regarding increment..!
  • Soumya Mukherjee on CGHS Kolkata Approved Hospital 2024 List
Copyright © 2023 | Central Government Employees News | 7th Pay Commission News | Sitemap | Site maintained by TEUT Digital Concepts