New Delhi:
Budget 2025: National Pension System (NPS) had launched a new scheme NPS Vatsalya in the year 2024 keeping the minors in mind. The Pension Fund Regulatory and Development Authority (PFRDA) oversees the NPS. The objective of this scheme, launched in the Union Budget 2024-25, is to encourage parents to start saving early for the future of their children.
It is believed that the government may make some such announcements in the upcoming budget, which will increase people’s interest in government savings schemes and lead to more investment in them. NPS Vatsalya is a government initiative aimed at helping parents plan for the financial security of their children. However, there is no clarity regarding tax benefits on investment under this new scheme.
Can the government give relief on NPS Vatsalya?
Actually, the government has not yet announced any tax benefit for this scheme. In such a situation, can the government be expected to announce any tax benefit in Budget 2025 to encourage parents to invest in NPS Vatsalya? about this Economic Times Talked to some experts. Let us know what is his opinion regarding the announcement of tax benefit in NPS Vatsalya in Budget 2025.
Yeshu Sehgal, Head of Tax Markets, AKM Global, a tax and consulting firm, said, “This budget aims to provide clarity regarding tax benefits in this scheme designed to provide financial security to children below 18 years of age.” Hopefully, Sukanya Samriddhi Yojana already exists for girls but NPS Vatsalya Scheme is not gender specific, hence this scheme may seem more attractive to the parents. Legal guardians of orphan children can invest on their behalf in the scheme. Some tax benefits can encourage parents to invest in this scheme.
Kinjal Bhuta, Secretary, Bombay Chartered Accountants Society (BCAS), said, “NPS Vatsalya is a pension scheme for minors below 18 years of age, which will be launched in September 2024. Currently, investment in NPS Vatsalya No tax benefit is available under section 80CCD because this scheme was introduced after the budget in the month of July 2024. It is expected that to encourage this new scheme, the government can consider giving tax benefits to the parents for investing in PPF. account).”
Yogesh Kale, Executive Director, Nangia Anderson LLP said, “NPS Vatsalya Scheme is a pension scheme for minors in India that allows parents to save for the future of their children. The announcement was made by the Finance Minister in the Union Budget 2024, at present tax deduction is not allowed for investments made in NPS. If the government considers allowing tax benefits on such investments in 2025, this initiative of the government to secure the future of children will get a further boost.”