Union Budget 2024: NPS scheme is a contributory pension scheme, but now investments can also be made in this scheme in the name of children. While presenting the budget today, Finance Minister Nirmala Sitharaman has announced the ‘NPS Vatshalya Scheme’.
NPS Vatshalya Scheme: National Pension System is a contributory pension scheme run by the government, so that income can be ensured even after retirement. Under this scheme, you have to invest for a long period in working life. But now parents will also be able to invest in this scheme in the name of children. For this, Finance Minister Nirmala Sitharaman has announced ‘NPS Vatshalya Scheme’ while presenting the budget today.
In this scheme, parents or legal guardians will be able to make contributions for minors. When the minor becomes an adult, the scheme can be converted into a normal NPS account. Apart from this, another big announcement has been made for NPS, that is, the employer’s contribution has been increased from 10 percent to 14 percent.
Union Budget 2024-25 proposes:
👉 NPS-Vatsalya, a plan for contribution by parents and guardians for minors, to be launched
👉 Plan can be seamlessly converted into a normal NPS account on minor becoming an adult#Budget2024 #BudgetForViksitBharat pic.twitter.com/NO5wcKXkXr
— Ministry of Finance (@FinMinIndia) July 23, 2024
NPS is a market linked scheme
Let us tell you that this scheme currently being run for retirement plan is a market linked scheme. Earlier this scheme was started only for government employees, but after the year 2009, the government started the National Pension Scheme for private sector employees as well. Money is invested in it in two ways. First Tier-1 and Tier-2.
Money is deposited in two parts
NPS Tier-1 is a retirement account, while Tier-2 is a voluntary account. While opening the account, you have to invest Rs 500 in Tier 1. After this, you have to put Rs 1000 in Tier 2. You have to make this contribution in every financial year under all circumstances. You can withdraw 60 percent of the total amount deposited in NPS in lump sum at the time of retirement, while the remaining 40 percent goes into the pension scheme. There is no limit on investment in NPS. The higher the amount of annuity of 40 percent, the better your pension will be in old age.
