NPS Vatsalya Scheme, launched on 18th September 2024, is a contributory pension plan aimed at fostering a fully pensioned society. It enables parents or guardians to save for their minor dependents with a minimum annual contribution of ₹1,000 and no upper limit. Upon reaching adulthood, the minor’s account transitions seamlessly into a regular NPS account. The scheme is implemented via Points of Presence (PoPs), including bank branches, non-bank entities, and online platforms regulated by the Pension Fund Regulatory and Development Authority (PFRDA).
The scheme encourages inter-generational equity and financial security by promoting early savings for children and fostering a culture of retirement planning from a young age. To incentivize participation, the scheme provides tax benefits under the old tax regime. Parents or guardians, including salaried individuals, can claim income tax deductions of up to ₹50,000 under Section 80CCD(1B) for contributions made to NPS Vatsalya accounts, effective 1st April 2025. This initiative aims to instill a habit of retirement planning and ensure financial security across generations through early investment in a retirement corpus.
GOVERNMENT OF INDIA
MINISTRY OF FINANCE
DEPARTMENT OF FINANCIAL SERVICES
LOK SABHA
UNSTARRED QUESTION NO. 3843
ANSWERED ON MONDAY, 24 MARCH, 2025
OBJECTIVES OF NPS VATSALYA SCHEME
†3843. Shri Anoop Pradhan Valmiki:
Ms. Bansuri Swaraj:
Will the Minister of Finance be pleased to state:
(a) whether the Government has introduced the NPS Vatsalya Scheme to enhance saving for salaried employees;
(b) if so, the salient features and objectives of the Scheme; and
(c) whether any tax benefits or additional incentives are provided to those enrolling in the scheme and if so, the details thereof along with the manner in which this scheme is useful particularly for salaried persons?
ANSWER
MINISTER OF STATE FOR FINANCE
(SHRI PANKAJ CHAUDHARY)
(a) & (b) NPS-Vatsalya Scheme, a contributory pension scheme for minors, has been launched on 18.09.2024 with the objective of creation of a fully pensioned society. The scheme is designed for parents/guardians to contribute, a minimum of Rs. 1000 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 NPS account. 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). The NPS Vatsalya account can also be opened through online platform extended by the NPS Trust.
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 with the start of early investment for a retirement corpus.
(c) Under the old tax regime, income tax deduction u/s 80CCD (1B) up to Rs. 50,000 /- has been extended towards NPS Vatsalya contribution made by the parents or guardians, including salaried persons, w.e.f. 01.04.2025.
