Finance Minister Nirmala Sitharaman will launch the NPS Vatsalya Yojana in New Delhi on Wednesday, September 18. This scheme will provide financial security to all Indian children. Under this scheme, parents can invest in a pension account for the future of their children. This scheme was announced in the Union Budget.
New Delhi: Finance Minister Nirmala Sitharaman will launch the NPS Vatsalya Yojana on September 18. It was announced in the Union Budget 2024-25. The aim of the scheme is to provide a strong financial foundation to all the children of the country. School children will also join the Finance Minister in the program. On this occasion, an online platform for investing in NPS Vatsalya will be launched. Along with this, a book giving information about the scheme will also be released. Permanent Retirement Account Number (PRAN) cards will be given to minor subscribers. To make it more accessible and effective, NPS Vatsalya programs will be organized at about 75 places across India. These places will connect to the main program to be held in New Delhi through video conferencing. PRAN membership will also be given to new minor subscribers in their respective areas.
How much money can you start investing?
Through the NPS Vatsalya Yojana, parents can save for their child’s future by investing in a pension account. This scheme uses the power of compounding to create wealth in the long term. It has many investment options. Parents can start investing in their child’s name with a minimum of Rs 1,000 annually. This makes the scheme accessible to all sections of society. The scheme promotes inclusiveness and financial security.
What is the lock-in period?
Under this scheme, after a lock-in period of 3 years, 25% of the deposit amount can be withdrawn for needs like education, critical illness and disability. This can be done a maximum of three times. In the Union Budget 2024, it has been proposed to increase the rate of deduction in the National Pension System (NPS) by the employer for private sector employees from 10 per cent of the employee’s salary to 14 per cent.
Will private employees get the facility?
Employees in both private and public sectors who opt for the new tax regime will be entitled to a deduction of up to 14% of their salary towards employer’s contribution to their NPS account.
Should you invest?
The increase in contribution limit will strengthen the social security of the workforce. NPS Vatsalya Yojana will be a great opportunity for parents to secure their child’s future. By starting early and saving regularly, families can create a large corpus for their children. This scheme is in line with the government’s vision of financial security for people of all age groups.
Key benefits of this scheme
Pension scheme from childhood: With this scheme, children get connected to the pension scheme from childhood.
Long term investment: There is a high possibility of money growth by investing for a long time.
Tax benefit: Tax benefits can be obtained on investment in this scheme.
Flexibility: The amount and period of investment in the scheme can be chosen flexibly.
Child’s ownership: The account is in the name of the child, so that he can decide his future himself.
Key features of the scheme
Eligibility: Any Indian citizen can open this account in the name of his/her child.
Investment: Parents can make regular investments in the child’s NPS account.
Withdrawal: The child can withdraw funds from the account on attaining the age of 18 years or can avail pension at the age of 60 years.
