NPS Vatsalya Scheme: Eligibility, Tax Benefits & How to Apply

Posted on Friday, March 28th, 2025 | By IndusInd Bank

Financial security is paramount, especially as you approach retirement. The National Pension System (NPS) is a reliable option for many individuals for the same reason. Among its various offerings, the NPS Vatsalya Scheme is particularly noteworthy. This scheme is designed to ensure a financially secure retirement, providing peace of mind to its subscribers. In this article, we delve into the NPS Vatsalya Scheme details, including eligibility, tax benefits, and how to apply. Moreover, we will explore how linking this scheme with an IndusInd Bank Savings Account can enhance your financial planning.

Understanding the NPS Vatsalya Scheme

The NPS Vatsalya Scheme is an attractive option for those seeking long-term investment in their retirement plans. It offers a structured and regulated framework to help individuals accumulate a substantial corpus over time. Managed by the Pension Fund Regulatory and Development Authority (PFRDA), this scheme aims to provide retirement income to its subscribers.

Eligibility Criteria

To enrol in the NPS Vatsalya Scheme, you must meet certain eligibility criteria:

1. Age: Individuals aged between 18 and 65 years can join the scheme.
2. Citizenship: Both Indian citizens and NRIs (Non-Resident Indians) are eligible.
3. KYC Compliance: Applicants must fulfil Know Your Customer (KYC) requirements, which include valid identity and address proofs.

Tax Benefits

One of the major attractions of the NPS Vatsalya Scheme is its significant tax benefits:

1. Section 80C: Contributions up to ₹ 1.5 lakh are eligible for deduction under this section.
2. Additional Deduction: An additional deduction of ₹ 50,000 is available under Section 80CCD(1B), exclusively for NPS contributions.
3. Maturity Benefits: Upon maturity, 60% of the corpus is tax-free, while the remaining 40% must be used to purchase an annuity, ensuring a regular pension.

These NPS Vatsalya Scheme tax benefits make it an appealing choice for tax-savvy investors. However, you should know that these deductions are only applicable if you select the old regime of taxation.

How to Apply for the NPS Vatsalya Scheme?

Applying for the NPS Vatsalya Scheme is a straightforward process:

1. Online Registration: Visit the eNPS website to register. Fill in the required details, including personal information, bank details, and choice of pension fund manager.
2. KYC Verification: Complete the KYC process either online through Aadhaar-based verification or by submitting physical documents to a Point of Presence (POP).
3. Contribution: Make your initial contribution through net banking or debit card. Subsequent contributions can be made periodically, as per your convenience.

Once you have your NPS Vatsalya Scheme, you need a savings account that would enhance your journey towards financial security. You can use a savings account to set up a payment mandate for contributions towards the scheme. If you want to have an account that lets you use all the money present in the account, consider IndusInd Bank’s Indus Delite Zero Balance Savings Account.

Introducing IndusInd Bank’s Indus Delite Zero Balance Savings Account

Integrating the NPS Vatsalya Scheme with an IndusInd Bank Savings Account can streamline your financial management. Here is how:

Benefits of IndusInd Bank Savings Account

IndusInd Bank offers a range of savings accounts tailored to meet diverse financial needs. The Indus Delite Savings Account in particular, stands out with its features:

• Zero Balance Requirement: Enjoy the flexibility of an online zero balance saving account opening allowing you to maintain liquidity without the pressure of maintaining a minimum balance.
• Seamless Online Banking: Effortlessly manage your funds with robust internet banking and mobile app services.
• Attractive Interest Rates: Benefit from competitive interest rates, enhancing your savings over time.

Why Link with NPS Vatsalya?

Linking your NPS Vatsalya Scheme with an IndusInd Bank Savings Account offers several advantages:

1. Automatic Contributions: Set up systematic contributions from your savings account to the NPS, ensuring regular investments without manual intervention.
2. Tax Management: Easily track your NPS contributions and corresponding tax benefits through your bank statements.
3. Financial Integration: Having both your savings account and pension scheme with the same bank facilitates better financial planning and oversight.

Also Read: Should You Invest Your Excess Funds in Liquid Funds or Savings Accounts?

Conclusion

The NPS Vatsalya Scheme is a prudent choice for those looking to secure their retirement with a reliable pension plan. Its eligibility criteria are accommodating, and the tax benefits are substantial, making it a favoured option among investors. By linking this scheme with an IndusInd Bank Savings Account, you can further optimize your financial strategy, ensuring seamless transactions and enhanced tax management. Whether you are opening a new account or integrating with an existing one, the synergy between NPS Vatsalya and IndusInd Bank can be a cornerstone of your long-term financial security.

Open a Savings Account with IndusInd Bank today!

Disclaimer: The information provided in this article is generic and for informational purposes only. It is not a substitute for specific advice in your circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for making any financial decisions based on the contents and information.