Ministry of Finance STREAMLINING OF NATIONAL PENSION SYSTEM (NPS) Posted On: 10 DEC 2018 3:01PM by PIB Delhi Decision The Union Cabinet in its Meeting on 6th December, 2018 has approved the following proposal for streamlining the National Pension System (NPS). Enhancement of the mandatory contribution by the Central Government for its employees covered under NPS Tier-I from the existing 10% to 14%. Providing freedom of choice for selection of Pension Funds and pattern of investment to central government employees. Payment of compensation for non-deposit or delayed deposit of NPS contributions during 2004-2012. Tax exemption limit for lump sum withdrawal on exit has been enhanced to 60%. With this, the entire withdrawal will now be exempt from income tax. (At present, 40% of the total accumulated corpus utilized for purchase of annuity is already tax exempted. Out of 60% of the accumulated corpus withdrawn by the NPS subscriber at the time of retirement, 40% is tax exempt ...