Business & Finance
Tue, August 12, 2025
[ Today @ 04:38 AM ]: Business Today
[ Today @ 04:37 AM ]: reuters.com
Mon, August 11, 2025
[ Yesterday Evening ]: Upper
[ Yesterday Evening ]: WOFL
[ Yesterday Evening ]: Ottumwa Courier, Iowa
[ Yesterday Evening ]: KWQC
[ Yesterday Evening ]: Action News Jax
[ Yesterday Afternoon ]: MassLive
[ Yesterday Afternoon ]: profootballnetwork.com
[ Yesterday Afternoon ]: Columbia Basin Herald, Moses Lake, Wash.
[ Yesterday Afternoon ]: Telangana Today
[ Yesterday Afternoon ]: Fortune
[ Yesterday Afternoon ]: Wall Street Journal
[ Yesterday Morning ]: moneycontrol.com
[ Yesterday Morning ]: Seeking Alpha
[ Yesterday Morning ]: Seattle Times
[ Yesterday Morning ]: reuters.com
[ Yesterday Morning ]: Toronto Star
[ Yesterday Morning ]: The Globe and Mail
[ Yesterday Morning ]: Forbes
[ Yesterday Morning ]: Channel NewsAsia Singapore
[ Yesterday Morning ]: The New York Times
[ Yesterday Morning ]: The Financial Express
[ Yesterday Morning ]: Business Today
[ Yesterday Morning ]: BBC
[ Yesterday Morning ]: The Motley Fool
Sun, August 10, 2025
[ Last Sunday ]: Business Today
[ Last Sunday ]: BBC
[ Last Sunday ]: WISH-TV
[ Last Sunday ]: The Motley Fool
[ Last Sunday ]: Tulsa World
[ Last Sunday ]: Seeking Alpha
[ Last Sunday ]: The Globe and Mail
[ Last Sunday ]: ThePrint
[ Last Sunday ]: Forbes
[ Last Sunday ]: Chicago Tribune
[ Last Sunday ]: Searchenginejournal.com
[ Last Sunday ]: washingtonpost.com
[ Last Sunday ]: Impacts
[ Last Sunday ]: The Straits Times
[ Last Sunday ]: The News-Gazette, Champaign-Urbana, Ill.
[ Last Sunday ]: Ghanaweb.com
[ Last Sunday ]: U.S. News & World Report
[ Last Sunday ]: Palm Beach Post
[ Last Sunday ]: Sky News Australia
[ Last Sunday ]: Channel NewsAsia Singapore
Sat, August 9, 2025
[ Last Saturday ]: The Motley Fool
[ Last Saturday ]: Ghanaweb.com
[ Last Saturday ]: Patch
[ Last Saturday ]: news4sanantonio
[ Last Saturday ]: reuters.com
[ Last Saturday ]: Telangana Today
[ Last Saturday ]: Deadline
[ Last Saturday ]: Seeking Alpha
[ Last Saturday ]: Flightglobal
[ Last Saturday ]: The Telegraph
[ Last Saturday ]: The West Australian
[ Last Saturday ]: 12onyourside.com
[ Last Saturday ]: Business Insider
[ Last Saturday ]: Impacts
[ Last Saturday ]: Business Today
[ Last Saturday ]: BBC
[ Last Saturday ]: gpfans
[ Last Saturday ]: Penn Live
[ Last Saturday ]: HoopsHype
[ Last Saturday ]: Palm Beach Post
Fri, August 8, 2025
[ Last Friday ]: Seeking Alpha
[ Last Friday ]: The Observer, La Grande, Ore.
[ Last Friday ]: Sports Illustrated
[ Last Friday ]: St. Louis Post-Dispatch
[ Last Friday ]: AOL
[ Last Friday ]: The Tennessean
[ Last Friday ]: reuters.com
[ Last Friday ]: Fox News
[ Last Friday ]: The Motley Fool
[ Last Friday ]: Lincoln Journal Star
[ Last Friday ]: The Financial Express
[ Last Friday ]: Impacts
[ Last Friday ]: Business Today
[ Last Friday ]: Page Six
[ Last Friday ]: Reuters
[ Last Friday ]: moneycontrol.com
[ Last Friday ]: SmartCompany
Wed, August 6, 2025
[ Last Wednesday ]: LEADERSHIP Newspaper
[ Last Wednesday ]: Toronto Star
[ Last Wednesday ]: The Motley Fool
[ Last Wednesday ]: USA TODAY
[ Last Wednesday ]: BBC
[ Last Wednesday ]: Entrepreneur
[ Last Wednesday ]: Channel NewsAsia Singapore
[ Last Wednesday ]: Anfield Index
[ Last Wednesday ]: WDTN Dayton
[ Last Wednesday ]: HoopsHype
[ Last Wednesday ]: U.S. News & World Report
[ Last Wednesday ]: Milwaukee Journal Sentinel
[ Last Wednesday ]: moneycontrol.com
[ Last Wednesday ]: Post and Courier
[ Last Wednesday ]: Tallahassee Democrat
[ Last Wednesday ]: NY Daily News
[ Last Wednesday ]: WSB-TV
[ Last Wednesday ]: Realtor.com
[ Last Wednesday ]: RTE Online
[ Last Wednesday ]: Tasting Table
[ Last Wednesday ]: The Irish News
[ Last Wednesday ]: Forbes
[ Last Wednesday ]: Ghanaweb.com
[ Last Wednesday ]: Business Today
[ Last Wednesday ]: Claremore Daily Progress, Okla.
[ Last Wednesday ]: Seeking Alpha
[ Last Wednesday ]: KXRM Colorado Springs
[ Last Wednesday ]: KIRO
Tue, August 5, 2025
[ Last Tuesday ]: Business Today
[ Last Tuesday ]: KCCI Des Moines
[ Last Tuesday ]: Los Angeles Times
[ Last Tuesday ]: Patch
[ Last Tuesday ]: The New York Times
[ Last Tuesday ]: Fortune
[ Last Tuesday ]: RTE Online
[ Last Tuesday ]: Ghanaweb.com
[ Last Tuesday ]: The Messenger
[ Last Tuesday ]: Michigan Advance
[ Last Tuesday ]: BBC
[ Last Tuesday ]: Seeking Alpha
[ Tue, Aug 05th ]: Toronto Star
[ Tue, Aug 05th ]: syracuse.com
[ Tue, Aug 05th ]: Reading Eagle, Pa.
[ Tue, Aug 05th ]: Forbes
[ Tue, Aug 05th ]: moneycontrol.com
[ Tue, Aug 05th ]: Austin American-Statesman
[ Tue, Aug 05th ]: reuters.com
[ Tue, Aug 05th ]: The Irish News
[ Tue, Aug 05th ]: The Hill
[ Tue, Aug 05th ]: Tallahassee Democrat
[ Tue, Aug 05th ]: The Scotsman
[ Tue, Aug 05th ]: Investopedia
[ Tue, Aug 05th ]: The Globe and Mail
[ Tue, Aug 05th ]: Impacts
[ Tue, Aug 05th ]: Euronews
[ Tue, Aug 05th ]: Associated Press
Mon, August 4, 2025
[ Mon, Aug 04th ]: Channel NewsAsia Singapore
[ Mon, Aug 04th ]: The Motley Fool
[ Mon, Aug 04th ]: Fortune
[ Mon, Aug 04th ]: moneycontrol.com
[ Mon, Aug 04th ]: Albuquerque Journal
[ Mon, Aug 04th ]: The Irish News
[ Mon, Aug 04th ]: The Center Square
[ Mon, Aug 04th ]: TwinCities.com
[ Mon, Aug 04th ]: Seeking Alpha
[ Mon, Aug 04th ]: Ghanaweb.com
[ Mon, Aug 04th ]: The Straits Times
[ Mon, Aug 04th ]: CoinTelegraph
[ Mon, Aug 04th ]: newsbytesapp.com
[ Mon, Aug 04th ]: Forbes
[ Mon, Aug 04th ]: The New York Times
[ Mon, Aug 04th ]: News 8000
[ Mon, Aug 04th ]: BBC
[ Mon, Aug 04th ]: Palm Beach Post
[ Mon, Aug 04th ]: ThePrint
[ Mon, Aug 04th ]: Nebraska Examiner
[ Mon, Aug 04th ]: Artemis
[ Mon, Aug 04th ]: Business Today
[ Mon, Aug 04th ]: RTE Online
[ Mon, Aug 04th ]: The Financial Express
[ Mon, Aug 04th ]: The Goshen News
[ Mon, Aug 04th ]: WISH-TV
[ Mon, Aug 04th ]: rediff.com
Sun, August 3, 2025
[ Sun, Aug 03rd ]: Ghanaweb.com
[ Sun, Aug 03rd ]: news4sanantonio
[ Sun, Aug 03rd ]: ESPN
[ Sun, Aug 03rd ]: USA TODAY
[ Sun, Aug 03rd ]: The Financial Express
[ Sun, Aug 03rd ]: Forbes
[ Sun, Aug 03rd ]: BBC
[ Sun, Aug 03rd ]: Sports Illustrated
[ Sun, Aug 03rd ]: The Motley Fool
[ Sun, Aug 03rd ]: Politico
[ Sun, Aug 03rd ]: TheWrap
[ Sun, Aug 03rd ]: Press-Telegram
[ Sun, Aug 03rd ]: reuters.com
[ Sun, Aug 03rd ]: moneycontrol.com
[ Sun, Aug 03rd ]: Seeking Alpha
[ Sun, Aug 03rd ]: Flightglobal
Sat, August 2, 2025
[ Sat, Aug 02nd ]: Grand Forks Herald
[ Sat, Aug 02nd ]: WSAV Savannah
[ Sat, Aug 02nd ]: 12onyourside.com
[ Sat, Aug 02nd ]: moneycontrol.com
New Income Tax Bill 2025: Lumpsum withdrawal tax relief, new rules for early exits in UPS, NPS - BusinessToday
//business-finance.news-articles.net/content/202 .. es-for-early-exits-in-ups-nps-businesstoday.html
Published in Business and Finance on Tuesday, August 12th 2025 at 4:38 GMT by Business Today🞛 This publication is a summary or evaluation of another publication 🞛 This publication contains editorial commentary or bias from the source
The Bill lays out clear provisions for UPS, offering full tax exemption on the commuted portion of pension payouts under the scheme. It also reaffirms that NPS withdrawals will retain their current tax benefits allowing up to 60% of the corpus to be withdrawn tax-free upon closure of the account or exit from the scheme, as per existing rules.
New Income Tax Bill 2025: Tax Relief on Lumpsum Withdrawals and Revised Rules for Early Exits in UPS and NPS
In a significant overhaul of India's taxation framework, the government has introduced the Income Tax Bill 2025, which brings targeted relief measures for retirees and pension holders. This legislation, aimed at easing the financial burden on individuals during their post-retirement phase, focuses primarily on providing tax exemptions for lumpsum withdrawals from pension schemes while introducing stricter yet more flexible rules for early exits from the Unified Pension Scheme (UPS) and the National Pension System (NPS). The bill reflects the government's broader strategy to encourage long-term savings, promote financial security in retirement, and align tax policies with evolving economic needs, especially in the wake of rising inflation and changing workforce dynamics.
At the heart of the bill is the provision for tax relief on lumpsum withdrawals. Under the previous regime, lumpsum withdrawals from pension funds were often subject to income tax, depending on the amount and the individual's tax slab. This could result in substantial deductions, sometimes up to 30% or more for higher earners, deterring many from opting for one-time payouts. The new bill addresses this by introducing a graded exemption structure. For instance, lumpsum withdrawals up to a certain threshold—reportedly set at Rs 25 lakh for NPS subscribers—will now be entirely tax-free, provided the funds are withdrawn after the age of 60 or upon superannuation. This move is particularly beneficial for middle-class retirees who rely on these funds for major expenses like healthcare, housing, or family obligations. For amounts exceeding this limit, a reduced tax rate of 10% will apply, down from the earlier slab rates, making it more attractive for individuals to access their savings without facing punitive taxation.
The rationale behind this relief is multifaceted. Government officials have emphasized that it incentivizes participation in formal pension schemes, which have seen sluggish growth due to perceived tax inefficiencies. By offering these concessions, the bill aims to boost enrollment in NPS, which currently covers over 1.5 crore subscribers but has room for expansion, especially among the informal sector workforce. Experts suggest this could lead to increased savings rates, potentially channeling more funds into the economy through investments in government securities and equities, as NPS portfolios often include. Moreover, this aligns with global trends where countries like the US and UK provide similar tax breaks on retirement withdrawals to support aging populations.
Shifting focus to the new rules for early exits, the bill introduces nuanced guidelines for both UPS and NPS, balancing flexibility with safeguards against premature depletion of retirement corpus. The Unified Pension Scheme, a relatively new initiative designed for government employees, previously allowed early exits only under exceptional circumstances such as medical emergencies or job loss, with heavy penalties including forfeiture of employer contributions. The 2025 bill relaxes these norms by permitting early withdrawals after a minimum lock-in period of 10 years, but with conditions. For UPS participants, early exit will now incur a 15% penalty on the withdrawn amount, reduced from 25%, and the funds can be accessed for specified purposes like education, marriage, or housing. However, to prevent misuse, the bill mandates that at least 60% of the corpus must remain invested until retirement age, ensuring long-term security.
For the National Pension System, which caters to both public and private sector employees as well as self-employed individuals, the changes are even more progressive. Early exits were historically restricted, with partial withdrawals limited to 25% of the corpus for critical needs. The new rules expand this to 40% for subscribers under 50 years old, provided they have contributed for at least five years. This is a game-changer for younger professionals facing life events such as starting a business or dealing with unforeseen financial crises. Additionally, the bill introduces a "hardship clause" allowing full early exit in cases of terminal illness or permanent disability, with no tax implications on the withdrawn amount up to Rs 10 lakh. These provisions are designed to make NPS more user-friendly, addressing criticisms that the scheme was too rigid and discouraged younger demographics from joining.
The bill also incorporates safeguards to maintain the integrity of these schemes. For both UPS and NPS, early withdrawals will now require approval from a designated regulatory body, such as the Pension Fund Regulatory and Development Authority (PFRDA), to verify the legitimacy of the request. This is intended to curb fraudulent claims and ensure that the primary objective of building a retirement nest egg is not undermined. Furthermore, the legislation ties these rules to inflation adjustments; thresholds for tax-free withdrawals and penalties will be reviewed biennially to account for economic changes, providing adaptability in a volatile financial landscape.
From a broader perspective, the Income Tax Bill 2025 is part of the government's fiscal strategy to reform personal finance taxation. It complements other recent measures, such as increased deductions under Section 80C for pension contributions, and is expected to benefit millions of Indians. Financial advisors are already recommending that individuals reassess their retirement portfolios in light of these changes. For example, those nearing retirement might opt for lumpsum withdrawals to fund immediate needs without the tax hit, while younger workers could leverage the early exit flexibility for mid-career pivots.
Critics, however, point out potential drawbacks. Some argue that easing early exits could lead to insufficient savings at retirement, exacerbating old-age poverty. Others worry about the revenue implications for the government, as tax relief on large withdrawals might strain public finances. Nevertheless, proponents counter that the bill strikes a fair balance, promoting both savings and liquidity.
In conclusion, the Income Tax Bill 2025 represents a forward-thinking approach to pension taxation, offering substantial relief on lumpsum withdrawals and more lenient rules for early exits in UPS and NPS. By reducing tax burdens and enhancing flexibility, it aims to empower individuals to manage their finances better throughout their lives. As the bill moves toward implementation, stakeholders will be watching closely to see its impact on India's retirement landscape, potentially setting a precedent for future reforms in personal finance policy. This legislation underscores the government's commitment to inclusive economic growth, ensuring that retirement is not just a phase of life but a secure and dignified one. (Word count: 912)
Read the Full Business Today Article at:
[ https://www.businesstoday.in/personal-finance/tax/story/new-income-tax-bill-2025-lumpsum-withdrawal-tax-relief-new-rules-for-early-exits-in-ups-nps-489028-2025-08-12 ]
