INCOME TAX15 Sept 2026
NPS Vatsalya: Rules for withdrawal and exit from scheme, explained | Mint
The National Pension Scheme's child plan, NPS Vatsalya, launched in September 2024, lets parents open a pension account for a minor. The child remains the sole beneficiary, and the account converts to a regular NPS account at 18. Parents can make partial withdrawals for education, health treatment, or disability. On exit, at least 80% of the corpus must buy an annuity. Keep the minor's documents ready.
Key Statutory Highlights
- NPS Vatsalya needs a minimum yearly contribution of ₹1,000, and the parent or guardian can claim tax benefits on a combined ₹2 lakh.
- Parents or guardians can make partial withdrawals for the child's education, treatment of specified illnesses, or disability above 75%.
- On exit, at least 80% of the accumulated corpus must be used to buy an annuity, and the remaining balance is paid as a lump sum.
Actionable Advice for Taxpayers / Founders:If you are opening an NPS Vatsalya account for your child, keep the birth certificate, passport, and PAN handy, and check the partial withdrawal process on your Central Recordkeeping Agency portal before you actually need the funds.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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