NPS Vatsalya: Finance Minister Nirmala Sitharaman has made many big announcements in the general budget. In this episode, investors have also been given a big relief on the front of NPS Vatsalya Scheme. Now investors in the scheme will get a tax deduction of Rs 50,000.
The Finance Minister said in her budget speech – It is proposed to extend the tax benefit available for the National Pension Scheme (NPS) under sub-section (1B) of section 80CCD of the Income Tax Act, 1961 to the contribution made to NPS Vatsalya accounts. A deduction of a maximum of Rs 50,000 will be allowed from the total income of the parent / guardian, the amount paid or deposited in the account of any minor under NPS.
About the scheme
All minor citizens up to the age of 18 years are eligible to open an account under the NPS Vatsalya scheme. The account is opened in the name of the minor and is managed by their guardian until the child attains majority, ensuring that the minor remains the sole beneficiary throughout the entire process. The scheme aims to create a fund for their children in the long term. Parents or guardians can contribute a minimum of Rs 1,000 annually without any maximum investment limit.
Relief to taxpayers
Let us tell you that today in Budget 2025, Finance Minister Nirmala Sitharaman has given a big relief to the taxpayers. The Finance Minister has proposed new tax slabs in her 2025-26 budget, under which people with income up to Rs 12 lakh will not have to pay any tax. Keeping in mind the standard deduction of Rs 75,000 for the salaried class, this limit will be Rs 12.75 lakh. Under the new tax system, people earning Rs 12 lakh annually in the next financial year 2025-26 will save Rs 80,000. On the other hand, people whose annual income is Rs 24 lakh or more. They can save Rs 1.10 lakh in income tax. Finance Minister Nirmala Sitharaman announced on Saturday in her budget to exempt individuals with annual income up to Rs 12 lakh from income tax and to change the tax slabs under the new tax system.
According to this change, as per government calculations, people with an annual income of Rs 13 lakh will save Rs 25,000 on tax liability. Similarly, people with an annual income of Rs 14 lakh will save Rs 30,000, those earning Rs 15 lakh will save Rs 35,000, those earning Rs 16 lakh will save Rs 50,000 and those earning Rs 17 lakh will save Rs 60,000. On the other hand, if the annual income is Rs 18 lakh, the savings will be Rs 70,000, Rs 80,000 on Rs 19 lakh, Rs 90,000 on Rs 20 lakh, Rs 95,000 on Rs 21 lakh, Rs 1 lakh on Rs 22 lakh, Rs 1.05 lakh on Rs 23 lakh. Those earning more than Rs 24 lakh will get a tax benefit of Rs 1.10 lakh.
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