Centre to launch ‘NPS Vatsalya’ scheme for long-term investment in children’s future

The Central Government is set to launch the ‘NPS Vatsalya’ scheme on September 18 to promote long-term financial security for children. Union Finance Minister Nirmala Sitharaman will officially unveil this pension scheme, which is tailored for parents and guardians looking to invest in their children’s future.

Announced during this year’s Union Budget, Finance Minister Sitharaman described the Vatsalya scheme as an ideal investment tool for those aiming for long-term financial planning for their children. The Pension Fund Regulatory and Development Authority (PFRDA), along with Union Minister of State for Finance Pankaj Chaudhary and senior officials from the Finance Ministry, will also be present at the inauguration ceremony.

The launch will take place simultaneously across 75 regions of the country, with the Finance Minister initiating the event through a video conference. At the inauguration, selected children will be issued permanent retirement account number (PRAN) membership cards by opening their Vatsalya accounts. Additionally, the scheme’s online portal and official brochure will be unveiled, providing a comprehensive guide to its features.

The ‘NPS Vatsalya’ scheme is available to Indian citizens, including Non-Resident Indians (NRIs) and Overseas Citizens of India (OCI), allowing parents to open accounts in their children’s names. The scheme offers flexibility, with a minimum deposit requirement of Rs 1,000 per year and no upper limit on contributions. Notably, the scheme provides tax benefits, with parents eligible for deductions beyond the Rs 1.5 lakh exemption under Section 80C. An additional deduction of up to Rs 50,000 is available under Section 80 CCD(1B).

Upon reaching the age of 60, 60 per cent of the accumulated funds can be withdrawn in a lump sum, while the remaining 40 per cent will be disbursed in the form of a regular pension. The scheme also aims to inculcate a sense of financial responsibility and savings discipline among children. Launched in 2004, the National Pension Scheme (NPS) has become a cornerstone of the government’s efforts to provide social and financial security to citizens. With the introduction of the Vatsalya scheme, the NPS expands its reach, drawing inspiration from other popular schemes such as the Public Provident Fund (PPF) and Sukanya Samriddhi Yojana.