{"id":1563,"date":"2025-02-17T14:47:39","date_gmt":"2025-02-17T09:17:39","guid":{"rendered":"https:\/\/www.caclubindia.com\/guide\/?p=1563"},"modified":"2025-06-26T15:55:49","modified_gmt":"2025-06-26T10:25:49","slug":"nps-vatsalya-scheme","status":"publish","type":"post","link":"https:\/\/www.caclubindia.com\/guide\/nps-vatsalya-scheme\/","title":{"rendered":"NPS Vatsalya Scheme: How to Save Taxes Up to Rs 2 Lakh?"},"content":{"rendered":"\n<p>NPS Vatsalya Scheme allows parents or guardians to open a National Pension System (NPS) account for their children, ensuring long-term savings and financial security.<\/p>\n\n\n\n<p>NPS is regulated and administered by the Pension Fund Regulatory and Development Authority.<\/p>\n\n\n\n<p>This Scheme was launched on 18.09.2024.<\/p>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"538\" src=\"https:\/\/www.caclubindia.com\/guide\/wp-content\/uploads\/2025\/02\/NPS-Vatsalya-Scheme-1024x538.png\" alt=\"\" class=\"wp-image-1564\" srcset=\"https:\/\/www.caclubindia.com\/guide\/wp-content\/uploads\/2025\/02\/NPS-Vatsalya-Scheme-1024x538.png 1024w, https:\/\/www.caclubindia.com\/guide\/wp-content\/uploads\/2025\/02\/NPS-Vatsalya-Scheme-300x158.png 300w, https:\/\/www.caclubindia.com\/guide\/wp-content\/uploads\/2025\/02\/NPS-Vatsalya-Scheme-768x403.png 768w, https:\/\/www.caclubindia.com\/guide\/wp-content\/uploads\/2025\/02\/NPS-Vatsalya-Scheme.png 1200w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_82_2 counter-hierarchy ez-toc-counter ez-toc-light-blue ez-toc-container-direction\">\r\n<div class=\"ez-toc-title-container\">\r\n<p class=\"ez-toc-title\" style=\"cursor:inherit\">Table of Contents<\/p>\r\n<span class=\"ez-toc-title-toggle\"><a href=\"#\" class=\"ez-toc-pull-right ez-toc-btn ez-toc-btn-xs ez-toc-btn-default ez-toc-toggle\" aria-label=\"Toggle Table of Content\"><span class=\"ez-toc-js-icon-con\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/span><\/a><\/span><\/div>\r\n<nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.caclubindia.com\/guide\/nps-vatsalya-scheme\/#Eligibility\" >Eligibility<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.caclubindia.com\/guide\/nps-vatsalya-scheme\/#Minimum_Contribution_Limit\" >Minimum Contribution Limit<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.caclubindia.com\/guide\/nps-vatsalya-scheme\/#NPS_Tax_Benefits\" >NPS Tax Benefits<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.caclubindia.com\/guide\/nps-vatsalya-scheme\/#Detailed_Breakdown_of_Deductions\" >Detailed Breakdown of Deductions:<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.caclubindia.com\/guide\/nps-vatsalya-scheme\/#Scope_of_Section_80CCD\" >Scope of Section 80CCD<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.caclubindia.com\/guide\/nps-vatsalya-scheme\/#Transition_to_Regular_NPS_Account\" >Transition to Regular NPS Account<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.caclubindia.com\/guide\/nps-vatsalya-scheme\/#KYC_Required_Once_the_Child_Becomes_18_Years\" >KYC Required Once the Child Becomes 18 Years<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-8\" href=\"https:\/\/www.caclubindia.com\/guide\/nps-vatsalya-scheme\/#Document_Required\" >Document Required<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-9\" href=\"https:\/\/www.caclubindia.com\/guide\/nps-vatsalya-scheme\/#Withdrawal_Conditions\" >Withdrawal Conditions<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-10\" href=\"https:\/\/www.caclubindia.com\/guide\/nps-vatsalya-scheme\/#Before_18_years_of_Age\" >Before 18 years of Age<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-11\" href=\"https:\/\/www.caclubindia.com\/guide\/nps-vatsalya-scheme\/#After_18_years_of_Age\" >After 18 years of Age<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-12\" href=\"https:\/\/www.caclubindia.com\/guide\/nps-vatsalya-scheme\/#In_Case_of_Death_of_Minor_or_Guardian\" >In Case of Death of Minor or Guardian<\/a><ul class='ez-toc-list-level-3' ><li class='ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-13\" href=\"https:\/\/www.caclubindia.com\/guide\/nps-vatsalya-scheme\/#Death_of_Minor\" >Death of Minor<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-3'><a class=\"ez-toc-link ez-toc-heading-14\" href=\"https:\/\/www.caclubindia.com\/guide\/nps-vatsalya-scheme\/#Death_of_Guardian\" >Death of Guardian<\/a><\/li><\/ul><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-15\" href=\"https:\/\/www.caclubindia.com\/guide\/nps-vatsalya-scheme\/#FAQs\" >FAQs<\/a><\/li><\/ul><\/nav><\/div>\r\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Eligibility\"><\/span>Eligibility<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Parents and Guardians can open the accounts on behalf of below 18 years child.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Minimum_Contribution_Limit\"><\/span>Minimum Contribution Limit<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Rs.1,000 per year.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>No upper limit on contributions.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"NPS_Tax_Benefits\"><\/span>NPS Tax Benefits<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Contributions made to NPS Vatsalya accounts qualify for the <strong><a href=\"https:\/\/www.caclubindia.com\/guide\/deductions-allowed-to-salaried-individuals-in-new-tax-regime\/\">deduction<\/a><\/strong>.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Detailed_Breakdown_of_Deductions\"><\/span>Detailed Breakdown of Deductions:<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<figure class=\"wp-block-image size-large\"><img loading=\"lazy\" decoding=\"async\" width=\"1024\" height=\"538\" src=\"https:\/\/www.caclubindia.com\/guide\/wp-content\/uploads\/2025\/02\/NPS-Tax-Benefits-in-IT-1024x538.png\" alt=\"\" class=\"wp-image-1569\" srcset=\"https:\/\/www.caclubindia.com\/guide\/wp-content\/uploads\/2025\/02\/NPS-Tax-Benefits-in-IT-1024x538.png 1024w, https:\/\/www.caclubindia.com\/guide\/wp-content\/uploads\/2025\/02\/NPS-Tax-Benefits-in-IT-300x158.png 300w, https:\/\/www.caclubindia.com\/guide\/wp-content\/uploads\/2025\/02\/NPS-Tax-Benefits-in-IT-768x403.png 768w, https:\/\/www.caclubindia.com\/guide\/wp-content\/uploads\/2025\/02\/NPS-Tax-Benefits-in-IT.png 1200w\" sizes=\"auto, (max-width: 1024px) 100vw, 1024px\" \/><\/figure>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Scope_of_Section_80CCD\"><\/span>Scope of Section 80CCD<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Scope of section 80CCD is proposed to be extended:<\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Deduction shall now be allowed to the parent\/guardian under the old taxation regime for amount deposited in the account of any minor child (up to 2 children) under the NPS-Vatsalya also.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Proposed deduction shall be allowed u\/s 80CCD(1B).<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Overall cap of Rs. 50,000 under the said sub-section (cumulatively for self and such minor child (up to 2 children) shall continue as earlier.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Transition_to_Regular_NPS_Account\"><\/span>Transition to Regular NPS Account<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>When Child will become 18 years of age, the NPS Vatsalya Scheme will be converted to a regular NPS Account.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>The child gains full control over their retirement savings.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>They can continue contributions independently.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"KYC_Required_Once_the_Child_Becomes_18_Years\"><\/span>KYC Required Once the Child Becomes 18 Years<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Fresh KYC of the minor required within 3 months from the date of attainting 18 years.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Document_Required\"><\/span>Document Required<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Date of birth of the Minor (Birth Certificate, School leaving certificate\/ Highschool certificate, PAN and Passport).<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>KYC of the Guardian shall be carried out by submitting Identity and Address Proof (Aadhaar, Driving License, Passport, Voter ID card, NREGA Job Card, National Population Register)<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>If the guardian is NRI then the NRE\/NRO Bank Account (solo or joint) of the minor is required.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Withdrawal_Conditions\"><\/span>Withdrawal Conditions<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Before_18_years_of_Age\"><\/span>Before 18 years of Age<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Guardians can withdraw partial amount up to 25% of contribution after the lock-in-period of 3 years.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Withdrawal may be for education, specified illness and disability.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li>Maximum 3 times withdrawal can be done till the child attains 18 years of age.<\/li>\n<\/ul>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"After_18_years_of_Age\"><\/span>After 18 years of Age<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Accumulated Corpus is equal to or greater than 2.5 Lakh &#8211; <\/strong>At least 80% of balance to be utilized for purchase of annuity which will provide regular income after retirement and remaining 20% can be withdrawn as a in lump sum.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>Accumulated Corpus is less than 2.5 Lakh &#8211; <\/strong>Option to withdraw entire balance as lump sum.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"In_Case_of_Death_of_Minor_or_Guardian\"><\/span>In Case of Death of Minor or Guardian<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Death_of_Minor\"><\/span>Death of Minor<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Entire accumulated corpus returned to the guardian.<\/p>\n\n\n\n<h3 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Death_of_Guardian\"><\/span>Death of Guardian<span class=\"ez-toc-section-end\"><\/span><\/h3>\n\n\n\n<p>Another guardian to be registered through fresh KYC.<\/p>\n\n\n\n<p>In case of both the parents, the legally appointed guardian can continue the account with or without making contributions to the account.<\/p>\n\n\n\n<p>Once the child attains the age 18 years, the subscriber has an option to continue or exit from the scheme.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"FAQs\"><\/span>FAQs<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<div class=\"schema-faq wp-block-yoast-faq-block\"><div class=\"schema-faq-section\" id=\"faq-question-1739783512934\"><strong class=\"schema-faq-question\">What is NPS Vatsalya Scheme?<\/strong> <p class=\"schema-faq-answer\">This Scheme was notified by the Pension Fund Regulatory and Development Authority and allows parents and guardians to maintain NPS account for their minor children.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1739783525254\"><strong class=\"schema-faq-question\">What are the present provisions of section 80CCD?<\/strong> <p class=\"schema-faq-answer\">Section 80CCD allows for a deduction to income for the contributions made to the National Pension Scheme either by an employer and an employee or by any assessee. The withdrawal of the contributions is taxable subject to certain conditions.<\/p> <\/div> <div class=\"schema-faq-section\" id=\"faq-question-1739783577406\"><strong class=\"schema-faq-question\">What will happen to the contribution in NPS-Vatsalya when the amount is withdrawn?<\/strong> <p class=\"schema-faq-answer\">Partial withdrawal upto 25% of contribution, in accordance with the Scheme is allowed exemption u\/s 10(12BA) by Finance Bill 2025.<br\/>When the contribution is finally withdrawn, the amount on which deduction is allowed earlier, will be charged to tax.<\/p> <\/div> <\/div>\n","protected":false},"excerpt":{"rendered":"<p>NPS Vatsalya Scheme allows parents or guardians to open a National Pension System (NPS) account for their children, ensuring long-term [&hellip;]<\/p>\n","protected":false},"author":2,"featured_media":1564,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"site-sidebar-layout":"default","site-content-layout":"","ast-site-content-layout":"","site-content-style":"default","site-sidebar-style":"default","ast-global-header-display":"","ast-banner-title-visibility":"","ast-main-header-display":"","ast-hfb-above-header-display":"","ast-hfb-below-header-display":"","ast-hfb-mobile-header-display":"","site-post-title":"","ast-breadcrumbs-content":"","ast-featured-img":"","footer-sml-layout":"","theme-transparent-header-meta":"","adv-header-id-meta":"","stick-header-meta":"","header-above-stick-meta":"","header-main-stick-meta":"","header-below-stick-meta":"","astra-migrate-meta-layouts":"default","ast-page-background-enabled":"default","ast-page-background-meta":{"desktop":{"background-color":"var(--ast-global-color-4)","background-image":"","background-repeat":"repeat","background-position":"center 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center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"tablet":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""},"mobile":{"background-color":"var(--ast-global-color-5)","background-image":"","background-repeat":"repeat","background-position":"center center","background-size":"auto","background-attachment":"scroll","background-type":"","background-media":"","overlay-type":"","overlay-color":"","overlay-opacity":"","overlay-gradient":""}},"footnotes":""},"categories":[4],"tags":[],"class_list":["post-1563","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-income-tax"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v27.4 - https:\/\/yoast.com\/product\/yoast-seo-wordpress\/ -->\r\n<title>NPS Vatsalya Scheme: How to Save Taxes Up to Rs 2 Lakh? - Tax Guide<\/title>\r\n<meta name=\"description\" content=\"NPS Vatsalya Scheme allows parents or guardians to open a NPS account for their children, ensuring long-term savings and financial security.\" \/>\r\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\r\n<link rel=\"canonical\" href=\"https:\/\/www.caclubindia.com\/guide\/nps-vatsalya-scheme\/\" \/>\r\n<meta 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