Union Budget 2024: Govt introduces pension scheme for minor children

NPS Vatsalya Scheme

Type: Scheme under the National Pension Scheme (NPS).

Purpose: Helps parents/guardians plan for children’s future financial needs.

Account Details: The account can be opened for minor children, and contributions will accumulate until the child turns 18. After the child turns 18, funds can be transferred to a standard NPS account and may be converted to a non-NPS plan.

Key Facts about NPS

Purpose:

Voluntary scheme for post-retirement income.

Eligibility:

• Open to Indian citizens, including NRIs and Overseas Citizens of India.

Investment:

• Contributions are made in market-linked instruments (stocks, bonds) for potential higher returns.

PRAN:

• Permanent Retirement Account Number (PRAN) is allotted to each subscriber.

Flexibility:

• Accounts remain unchanged regardless of employment or location.

Governing Body:

• Pension Fund Regulatory and Development Authority (PFRDA).

Tax Benefits:

• Deductions under Section 80C and an additional ₹50,000 under Section 80CCD(1B).