A new initiative called the NPS Vatsalya scheme has been introduced to secure the financial future of children. This program allows parents of minors under 18 years old to accumulate funds in their children’s names. It operates under the National Pension System, with the key distinction being its focus on children. Now, you might be wondering if there are any tax-saving benefits associated with this scheme. Let’s find out!
How much can you save on taxes by investing in NPS?
Before diving into the tax advantages of the NPS Vatsalya Yojana, it’s important to understand the tax deductions available through the NPS. The NPS scheme offers several tax-saving benefits, allowing deductions under three sections of the Income Tax Act of 1961: Section 80CCD (1), 80CCD (1B), and 80CCD (2).
Section 80CCD(1) allows for a deduction from your gross income for contributions made to the NPS. This deduction is available to both salaried and self-employed individuals for their NPS investments.
What about tax deductions for the NPS Vatsalya scheme?
When it comes to tax deductions for the NPS Vatsalya Scheme, a report from the Economic Times cites Sumit Shukla, MD and CEO of Axis Pension Fund, stating that currently, there are no tax deductions available for NPS Vatsalya. He mentioned that the government has not issued any notifications regarding this matter yet. Any updates or new provisions will likely be revealed in the upcoming budget.
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