About NPS Vatsalya Scheme:
- It is a scheme under the National Pension Scheme (NPS).
- It is designed to help parents and guardians plan for their children's future financial needs.
- Under this scheme, parents or guardians can open an account for their minor children and make contributions towards their retirement savings.
- The funds will accumulate until the child turns 18.
- Once the child reaches adulthood, the accumulated amount will be transferred to the standard NPS account.
- This plan could be seamlessly converted into a non-NPS plan when the child becomes an adult.
- The scheme operates similarly to the existing NPS.
Key Facts about NPS:
- It is a voluntary retirement benefit scheme introduced by the Government of India to facilitate regular income post-retirement for all subscribers.
- A citizen of India, either a resident, non-resident, or an Overseas Citizen of India, can open an NPS account.
- It helps individuals build a retirement corpus by making regular contributions throughout their careers.
- NPS contributions are invested in market-linked instruments such as stocks and bonds, providing the potential for higher returns compared to traditional fixed-income options.
- Subscribers also have the option to exit this plan before retirement or opt for superannuation.
- It is based on a unique Permanent Retirement Account Number (PRAN), which is allotted to every subscriber.
- NPS accounts or PRAN will remain the same irrespective of changes in employment, city or state. It can be used from any location in India.
- PFRDA (Pension Fund Regulatory and Development Authority) is the governing body for NPS.
- Contributions to the NPS are eligible for tax deductions under Section 80C and an additional deduction of up to ₹50,000 under Section 80CCD(1B).
