NPS VATSALYA

National Pension System

National Pension System · Regulated by PFRDA

NPS VATSALYA

Give Your Child’s Future a Head Start

Start early. Save regularly. Build a stronger financial future.

NPS Vatsalya is a voluntary, contributory, long-term savings scheme designed exclusively for minors. The scheme is covered under the National Pension System (NPS) and regulated by PFRDA. It can be opened for Indian citizens below 18 years, including eligible NRIs and OCIs. The account is operated by a parent or legal guardian, while the minor remains the sole subscriber and beneficiary, with a PRAN issued in the minor’s name. Contributions are invested through PFRDA-registered Pension Funds to generate market-linked returns and support long-term financial security, early saving and financial planning.

Indian parents planning for child's future

Exclusively for Minors

Sole Subscriber & Beneficiary: Minor

Overview

NPS Vatsalya at a Glance

Feature	Details
Eligibility	Below 18 years – Indian citizens, eligible NRIs & OCIs
Subscriber	Minor
Account Operator	Parent / Legal Guardian
Minimum Contribution	₹250 at opening + ₹250 yearly
Maximum Contribution	No limit
Returns	Market-linked
Partial Withdrawal	Up to 25% of own contributions*
At 18 Years	Continue till 21 / Shift to NPS Tier I / Exit*

*Subject to applicable PFRDA withdrawal guidelines and age milestones.

Early Saving

Start with as little as ₹250/year

Minor remains the sole subscriber with PRAN in the child's name, operated by guardian.

Advantages

Key Benefits of NPS Vatsalya

Feature	What NPS Vatsalya Offers
Market-Linked Growth	Returns linked to market performance; not guaranteed
Tax Efficiency	Eligible tax benefits as per applicable tax laws
Power of Compounding	Start early and let savings grow over the long term
Financial Discipline	Regular investing builds a strong saving habit
Financial Security	Creates a long-term financial cushion for your child
Empower Your Child	Encourages early financial awareness and planning
Transparent & Accessible	Online access with relevant disclosures for transparency

Nurture & Protect

Securing your child's milestones

Building a disciplined long-term financial cushion right from your child's early years.

Milestone Transition

What Happens When the Child Turns 18?

On attaining 18 years, the subscriber must complete fresh KYC and provide the required nominee details. The account is thereafter managed by the subscriber.

Option	Provision
Continue in NPS Vatsalya	Continue in the scheme up to 21 years.
Shift to NPS	Shift the entire accumulated corpus to NPS under the applicable model, subject to required KYC.
Exit	Corpus below ₹8 lakh: 100% lump-sum withdrawal. Corpus ₹8 lakh or more: Up to 80% lump-sum withdrawal and at least 20% towards annuity.

Note: If no option is exercised by age 21, the account is automatically shifted to a higher-equity scheme under the Multiple Schemes Framework (MSF) of the same Pension Fund and thereafter governed by applicable NPS exit and withdrawal rules.

Turning 18

Full subscriber ownership & autonomy

Upon reaching adulthood, the child takes charge with their own KYC and nominee records.

Provisions

Partial Withdrawal

Partial withdrawal is permitted for specific needs of the minor.

Condition	Details
Purpose	Education, specified illness or disability above 75%
Lock-in	Minimum 3 years
Maximum Withdrawal	Up to 25% of the minor’s own contributions, excluding returns
Before 18	Maximum 2 withdrawals
18–21 years	2 additional withdrawals, subject to KYC

Education & Welfare

For higher education & vital needs

Permitted after a minimum 3-year lock-in up to 25% of the minor's own contributions.

Income Tax Rules

Tax Benefits

Tax treatment depends on the applicable tax regime and prevailing income-tax provisions.

Stage	Old Tax Regime	New Tax Regime
Contribution	Parent/guardian can claim deduction up to ₹50,000 for eligible contributions.	No deduction available.
Partial Withdrawal	Up to 25% of own contributions is tax-exempt, subject to applicable conditions.	Same tax exemption applies.
Exit / Closure	Up to 60% of the corpus can be withdrawn tax-free. Annuity purchase amount is also exempt at purchase.	Same tax exemption applies.
Death of Minor	Amount received by the parent, guardian or nominee is not treated as their income.	Same tax treatment applies.

Checklist

Documents Required for NPS Vatsalya

For	Documents / Requirement
Minor	Proof of Date of Birth – Birth Certificate, School Leaving/Matriculation Certificate, PAN or Passport, as applicable.
Parent / Legal Guardian	KYC document (Aadhaar, Driving Licence, Passport, Voter ID, etc.) along with PAN or Form 60.
Bank Account	Optional for resident Indians at opening; mandatory for NRIs/OCIs. Required for withdrawal/exit, as applicable.