NATIONAL
PENSION SCHEME : VATSALYA
NEWS: NPS Vatsalya scheme: An
early tool to save for your child's retirement.
WHAT’S IN THE NEWS?
NPS
Vatsalya Scheme:
- Purpose: Designed under NPS to help parents plan for
their children's future financial needs.
- Account
Opening:
Parents/guardians can open an NPS account for their minor children.
- Contributions: Regular contributions are made towards
retirement savings until the child turns 18.
- Transfer: Upon reaching adulthood (18 years), the
accumulated amount is transferred to a standard NPS account.
- Flexibility: Can be seamlessly converted into a non-NPS plan
when the child becomes an adult.
Key
Facts about NPS (National Pension Scheme):
- Objective: Voluntary retirement benefit scheme for regular
income post-retirement.
- Eligibility: Open to all Indian citizens, including
residents, non-residents, and Overseas Citizens of India (OCIs).
- Contributions: Subscribers build a retirement corpus through
regular contributions invested in market-linked instruments.
- Benefits: Offers potential for higher returns compared to
traditional fixed-income options.
- PRAN: Each subscriber gets a Permanent Retirement
Account Number (PRAN) which remains the same regardless of employment or
location changes.
- Tax Benefits: Contributions eligible for tax deductions under
Section 80C and an additional deduction up to ₹50,000 under Section
80CCD(1B).
- Regulation: Governed by the Pension Fund Regulatory and
Development Authority (PFRDA).
Source: https://www.businesstoday.in/personal-finance/tax/story/nps-vatsalya-scheme-an-early-tool-to-save-for-your-childs-retirement-how-beneficial-is-that-check-details-438657-2024-07-24