90,000 subscribers have been already enrolled under the NPS Vatsalya pension scheme since its launch in September 2024, M Nagaraju, the secretary of Department of Financial Services (DFS), said in a press briefing on Monday.

NPS Vatsalya is a pension scheme exclusively designed for minors, enabling parents to invest in their children’s future. Currently, it allows parents or guardians to open a pension account in the name of a child and contribute a minimum of ₹1,000 annually, with no upper limit. The latest tax incentives are expected to drive higher participation in the scheme.

The Union Budget 2025 extended tax exemptions under Sections 80CCD(1B), 12(B), and 80CCD(3) to NPS Vatsalya. A guardian subscribing to NPS Vatsalya can now claim a tax deduction of up to ₹50,000 annually. The exemption on withdrawals of up to 25% of self-contributions under Section 12(B) will also apply to NPS Vatsalya. Additionally, tax exemption on the receipt of accumulated wealth due to the death of an NPS subscriber under Section 80CCD(3) has been extended to the scheme.

In his press briefing, Nagaraju also said that the government is reviewing and simplifying rules to increase the foreign direct investment (FDI) limit in the insurance sector to 100% from the current 74%, the secretary of Department of Financial Services, M Nagaraju, said on Monday.  He added that the draft insurance bill to the Cabinet “shortly”.

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