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Tax relief for UPS
Financial Express Kochi
|July 05, 2025
THE UPS PROVIDES an assured pension of 50% of the last drawn salary (average basic pay of the last 12 months of service) upon superannuation for all staff completing a minimum of 25 years of service, with the value of such deferred compensation fully indexed to inflation.
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Under NPS, tax exemption is available for withdrawals up to 25% of the self-contribution during service. With the latest decision, this can now be availed under UPS also to meet exigencies. Those under the old income tax regime can now claim tax deduction up to ₹50,000 under section 80 CCD(1B) over and above the overall ceiling of ₹1.5 lakh under Sec 80CCE. Similarly, old tax regime also allows claim up to 20% of pay (employer share 10% and employee share 10%) as tax deduction under section 80 CCD subject to overall ceiling of ₹1.5 lakh u
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