What is NPS Vatsalya Scheme? The new pension plan for minors

The programme is scheduled to be launched on September 18, 2024. School children will also participate in the event. Sitharaman will also launch an online platform for enrollment in NPS Vatsalya, release a programme brochure and distribute Permanent Retirement Account Number (PRAN) cards to new minor subscribers.

NPS Vatsalya is a new initiative to help parents save for their children's future with a retirement account, while reaping the benefits of long-term wealth creation and compounding. The scheme offers flexible deposit and investment options, allowing parents to start with as little as Rs 1,000 per year in the name of their child, making it accessible to families from different economic backgrounds. It is important to note that the account will be converted into a regular NPS account when the child attains adulthood. Sitharaman ruled out any additional tax benefits for the scheme for now.

NPS Vatsalya is administered by the Pension Fund Regulatory and Development Authority (PFRDA) and aims to promote early financial planning for children. The Ministry of Finance stressed that this scheme reflects the commitment of the Government of India to improve long-term financial security and planning. It represents a significant advancement in the Indian pension system and focuses on securing the financial future and independence of coming generations.