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Key Points

The government reports 1.3 lakh minors enrolled under the NPS Vatsalya Scheme, aimed at fostering early retirement savings. Parents can claim tax deductions up to ₹50,000 under Section 80CCD (1B). The scheme is accessible through Points of Presence (PoPs) and online platforms for wider reach. Once the child turns 18, the account can be converted into a standard NPS account.

Key Points: 1.3 Lakh Minors Enrolled Under NPS Vatsalya Scheme Says Govt

  • 1.3 lakh minors enrolled under NPS Vatsalya since September 2023
  • Tax deduction up to ₹50,000 under Section 80CCD (1B)
  • Scheme accessible via PoPs and online platforms
  • Seamless conversion to NPS account upon majority
2 min read

1.3 lakh minors enrolled under NPS Vatsalya Scheme, says Govt

Over 130,000 minors registered under NPS Vatsalya Scheme, promoting early retirement savings with tax benefits under Section 80CCD (1B).

"NPS-Vatsalya promotes inter-generational equity and financial security by encouraging early savings for children - Pankaj Chaudhary"

New Delhi, Aug 12

A total of 1.3 lakh minors have been enrolled under the NPS Vatsalya Scheme, the Union government informed the Parliament.

In a written reply in the Lok Sabha, Minister of State for Finance Pankaj Chaudhary said that 130 thousand minor subscribers are registered under the NPS Vatsalya Scheme from September last year till August 3.

The NPS Vatsalya Yojana, also known as the National Pension System Vatsalya, is a retirement savings scheme designed for minor children in India.

“NPS-Vatsalya promotes inter-generational equity and financial security by encouraging early savings for children as well as promoting a culture and habit of retirement planning across generations,” Chaudhary said.

Under the old tax regime, an income tax deduction under Section 80CCD (1B) up to Rs 50,000 has been extended towards NPS-Vatsalya contribution made by the parent or guardian with effect from April 1.

The scheme is implemented through Points of Presence (PoPs), which include the bank branches and non-bank entities, under the regulation of the Pension Fund Regulatory and Development Authority (PFRDA).

These PoPs operate across India, in all geographies, thereby ensuring extensive coverage and accessibility, the Minister said. He added that the NPS-Vatsalya account can also be opened through an online platform extended by the NPS Trust, further enhancing reach and convenience.

NPS-Vatsalya Scheme, a contributory pension scheme for minors, was launched on September 18, 2024, to create a fully pensioned society.

The scheme is designed for parents/guardians to contribute a minimum of Rs 1,000 per annum with no ceiling on maximum contribution, for their minor subscriber.

On attaining the age of majority, the account of the subscriber can be seamlessly converted into an NPS account.

According to a June survey report by Grant Thornton Bharat, younger Indians, notably those aged 25 years or below, now prefer early retirement. Among this group, 43 per cent desire to retire between 45 and 55 years.

More than half (55 per cent) of respondents expect a monthly pension exceeding Rs 1 lakh. However, only 11 per cent believe their current investments are sufficient to meet these expectations, revealed the survey.

- IANS

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Reader Comments

S
Shreya B
While the scheme sounds good, I wonder how many middle-class families can actually afford to invest ₹1000+ annually for each child? The concept is nice but implementation needs more awareness campaigns in rural areas.
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Arjun K
Finally a pension scheme that thinks long-term! Our generation is realizing the importance of retirement planning early. The online enrollment option makes it very convenient for working parents like me.
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Priya S
The survey numbers are concerning - young Indians want to retire early but aren't saving enough. Schemes like NPS Vatsalya could help change this mindset if properly marketed to millennials and Gen Z parents.
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David E
As an NRI, I'm impressed by India's financial planning initiatives. The seamless conversion to regular NPS at adulthood is a smart feature. Would love to see similar schemes in other countries!
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Nisha Z
Good scheme but government should also focus on financial literacy. Many parents in my locality don't understand these benefits. Maybe tie up with schools to create awareness? 💡

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