Apply Online for ⁠Nps Vatsalya Scheme 2024 : enps.nsdl.com

Apply Online for ⁠Nps Vatsalya Scheme 2024 : enps.nsdl.com . Check Eligibility, Status of Scheme, Who Can Apply, benefits.

NPS Vatsalya, introduced in Budget 2024 – Key Points :

Purpose : Allows parents to contribute to minors’ retirement funds; converts to standard NPS at adulthood

Current NPS Adoption: 10-15% in corporate sector

Key Facts about NPS :

Voluntary : Retirement benefit scheme by the Government of India
Eligibility : Open to all Indian citizens, including NRIs and OCIs
Investment : Market-linked (stocks, bonds)
Flexibility : Options for early exit or superannuation
PRAN : Permanent Retirement Account Number for life
Regulation : Overseen by PFRDA

Tax Benefits :

Section 80C : Up to ₹1.5 lakh deduction
Section 80CCD(1B) : Additional ₹50,000 deduction
Employer Contributions : Private sector up to 10% of salary, Central Government up to 14%
Self-Employed : 20% of gross income, plus ₹50,000 extra

⁠Nps Vatsalya Scheme 2024

Finance Minister Nirmala Sitharaman introduced the NPS Vatsalya scheme in Budget 2024. This initiative proposes a National Pension Scheme (NPS) tailored for minors, allowing parents to contribute towards their children’s retirement fund from an early age. Upon reaching adulthood, the account seamlessly transitions into a standard NPS account.

However, with NPS adoption modest at 10-15% in the corporate sector and individuals facing challenges in allocating savings to retirement plans, expecting them to prioritize their children’s old age savings may be ambitious. Citizens need robust investment avenues for funding higher education costs.

Key Facts about NPS :

Voluntary Retirement Scheme: NPS is a retirement benefit scheme initiated by the Government of India to ensure regular income post-retirement for all subscribers.
Inclusive Eligibility: Citizens of India, including residents, non-residents, and Overseas Citizens of India (OCIs), can open an NPS account.
Retirement Corpus Building: It enables individuals to accumulate a retirement corpus by making consistent contributions over their professional careers.
Market-Linked Investments: Contributions to NPS are invested in market-linked instruments like stocks and bonds, offering potential for higher returns compared to traditional fixed-income options.
Flexibility in Exit Options: Subscribers have the flexibility to exit the scheme before retirement or opt for superannuation based on their financial planning needs.
Unique PRAN: Each subscriber receives a Permanent Retirement Account Number (PRAN) that remains constant irrespective of changes in employment, city, or state, accessible from anywhere in India.
Regulatory Oversight: PFRDA (Pension Fund Regulatory and Development Authority) oversees the functioning and regulations of NPS.
Tax Benefits: Contributions to NPS qualify for tax deductions under Section 80C, with an additional deduction of up to ₹50,000 available under Section 80CCD(1B).

Name of the scheme	NPS Vatsalya Scheme
Launched by	Government of India
Objectives	Securing children’s future by investing in NPS accounts
Beneficiaries	Children in India
Official website	National Pension Portal – enps.nsdl.com

NPS Vatsalya – A New Pension Scheme for Minors :

Overview of National Pension Scheme (NPS) :

The NPS is a voluntary pension system available to Indian citizens, including residents and NRIs, aged between 18 and 70 years.
It operates as a market-linked contribution scheme designed to help individuals save systematically for retirement.
Tax benefits are a key feature of the NPS, accessible under various sections of the Income Tax Act.

Tax Benefits Under the NPS :

Employees who contribute to the NPS can claim tax deductions :

Up to 10% of salary (Basic + DA) under section 80 CCD(1), within the overall limit of Rs. 1.50 lakh under Sec 80 CCE.
An additional deduction of up to ₹50,000 under section 80 CCD(1B) beyond the Rs. 1.50 lakh limit.

Benefits of NPS Vatsalya Scheme :

Promotion of Savings Habits :

Encourages savings habits in children from an early age.
Upon turning 18, the account can be converted to a standard NPS scheme, allowing independent management and contributions.

Retirement Fund Option :

Contributions begin when the child is a minor, accumulating a substantial amount by retirement.
Allows withdrawal of 60% of accumulated amount at retirement.
Converts to a standard NPS account at majority, ensuring continuity and potential for a robust retirement corpus.

Financial Security and Growth :

Provides a systematic approach to securing the child’s financial future.
Teaches responsible financial management and early investment habits.

Overall Scheme Value :

Valuable tool for building a retirement corpus and ensuring financial stability for children.

Applicability of NPS Vatsalya Scheme : Who Can Apply?

1. The NPS Vatsalya Scheme is applicable to all parents and guardians of minor children.

2. It extends the NPS coverage to include minors, offering a new investment avenue for ensuring children’s financial security and retirement planning.

NPS Vatsalya Scheme Application Process :

Visit the Official Website : Navigate to the official NPS website. The homepage of the website will appear.
Click on “Apply Here” : Select the “apply here” option displayed on the homepage. You will be redirected to a new page containing the application form.
Provide Your Information : Enter your personal details such as name, address, age, and date of birth. Upload all the required documents.
Review Your Information : Carefully review all the information filled in the application form.
Submit Your Application : Click on the submit button to successfully apply for the NPS Vatsalya Scheme.

How to Open / Apply for NPS Vatsalya Scheme ?

Opening Process :

The Central Government is expected to release details soon on how to open or apply for the NPS Vatsalya Scheme.
Applicants may likely be able to apply through the official eNPS website provided by the Central Government.
Alternatively, opening and contributing to the NPS Vatsalya Scheme might also be facilitated through selected banks’ internet banking portals.

Eligibility for NPS Vatsalya :

All parents and guardians, including Indian citizens, NRIs, or OCIs, are eligible to open an NPS Vatsalya account for their minor children.

Impact on Taxpayers :

Increased Contribution Limits : Employer contributions to NPS raised from 10% to 14% of salary (basic salary + dearness allowance), reducing income tax liability and increasing take-home pay.
Tax Benefits for Employers : Contributions to employees’ NPS accounts (up to 10% of salary, 14% for government employees) are deductible as ‘Business Expenses’ under section 36(1)(iv)(a) of the Income Tax Act.
Employee Tax Breaks : Employees can claim tax deductions on employers’ NPS contributions, up to 10% of their wages under section 80CCD(2), applicable across tax regimes.
Tax Advantages under Old Tax Regime : Additional deductions for employees’ own NPS contributions include up to 10% of salary under section 80CCD(1) (within Rs 1.5 lakh limit of section 80C) and an extra Rs 50,000 under section 80CCD(1B).
Introduction of NPS Vatsalya : A new scheme aiming to enhance financial security for minors by starting an NPS account, alongside increased contribution limits under NPS, promoting better tax benefits and long-term financial planning.

Required Documents :

Aadhar card
Passport size photograph
Mobile number
Bank account details
Date of birth of the child

Tax Benefits with NPS :

Employer Contribution Benefits :

Employers contributing to employees’ NPS accounts can claim a tax deduction.
The deduction is up to 10% of salary (Basic + DA) for contributions by private sector employers.
Contributions made by the Central Government enjoy an increased deduction of up to 14% of salary under Section 80 CCD(2).
This deduction is over and above the Rs. 1.50 lakh limit specified in section 80 CCE.

Self-Employed Individuals :

Self-employed individuals can also avail tax benefits through the NPS.
They can claim a deduction of up to 20% of their gross income under section 80 CCD(1).
This deduction falls within the overall limit of Rs. 1.50 lakh under Sec 80 CCE.
An additional deduction of up to ₹50,000 is available under section 80 CCD(1B).

Changes to NPS Contribution Limits :

Increased Contribution Limits : The contribution limit for NPS by private sector employers has been raised from 10% to 14% of the employee’s basic salary, effective under the new tax regime.
Enhanced Social Security Benefits : This adjustment aims to bolster social security benefits for employees, ensuring improved financial protection in the long term.
Impact on Taxation : The revision in NPS contribution limits is set to influence investment strategies and financial planning, promoting equitable taxation practices.
Government Announcement : Finance Minister Nirmala Sitharaman announced the proposal to enhance the deduction for employer contributions to NPS from 10% to 14% of employees’ salaries.
Implementation Details : The increased deduction applies to both private sector entities and public sector banks and undertakings opting for the New Tax Regime (NTR), offering additional tax benefits for employers.

OFFICIAL WEBSITE >> enps.nsdl.com >> NPS Vatsalya Scheme

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