Union Budget 2026: No changes in National Pension System in FM Sitharaman's ninth Budget speech

Union Budget 2026: Finance Minister Nirmala Sitharaman during her ninth Union Budget speech on Sunday did not propose any new changes to the National Pension System (NPS). NPS is the government’s flagship retirement savings scheme regulated by the Pension Fund Regulatory and Development Authority (PFRDA).

Budget 2026 did not contain any specific announcements related to NPS contributions, tax benefits, withdrawals, or annuity rules. The scheme continues to operate under existing regulations and policy frameworks.

The Economic Survey 2025-26 stated that the growth trajectory of the NPS stands out as a key indicator of increasing formalisation of retirement savings. As of December 31, 2025, the NPS had 211.7 lakh subscribers, with assets under management of about Rs 16.1 lakh crore. From FY15 to FY25, the number of subscribers grew at a compound annual growth rate (CAGR) of 9.5%, while assets under management expanded at a much faster CAGR of 37.3%. The Survey attributed this sharp rise in assets to higher participation, longer contribution horizons and growing acceptance of market-linked retirement products.

In her Union Budget 2025 speech, Finance Minister Nirmala Sitharaman revealed that subscribers of the pension scheme NPS Vatsalya will enjoy equivalent tax benefits as regular NPS contributors under Section 80CCD(1B). In a bid to enhance the appeal of NPS Vatsalya, Sitharaman proposed a tax exemption for annual contributions up to Rs 50,000 for participants.

Finance Minister Sitharaman expanded tax exemptions for NPS Vatsalya, including Sections 80CCD(1B), 12(B), and 80CCD(3).  This exemption is above the normal Rs 1.5 lakh under Section 80C. 

National Pension Scheme (NPS) India is a long-term investment plan for retirement under the purview of the Pension Fund Regulatory and Development Authority (PFRDA) and the Central Government. Investments can be made in NPS Tier-I account (deduction up to Rs. 2 lakhs available  under section 80CCD) or both NPS Tier-I and Tier-II account.