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Union Budget 2024: The NPS scheme is a contributory pension scheme, but now investments can also be made in this scheme in the name of children. While presenting the budget today, Finance Minister Nirmala Sitharaman has announced the ‘NPS Vatshalya Scheme’.

NPS Vatshalya Scheme: The National Pension System is a contributory pension scheme run by the government so that income can be ensured even after retirement. Under this scheme, you have to invest for a long period of working life. But now parents will also be able to invest in this scheme in the name of children. For this, Finance Minister Nirmala Sitharaman has announced the ‘NPS Vatshalya Scheme’ while presenting the budget today. Also, the employer’s contribution has been increased from 10 per cent to 14 per cent.

NPS is a market-linked scheme

Let us tell you that this scheme currently being run in terms of retirement plans is a market-linked scheme. Earlier this scheme was started only for government employees, but after the year 2009, the government started the National Pension Scheme for private sector employees as well. Money is invested in two ways in this. First Tier-1 and Tier-2.

Money is deposited in two parts.

NPS Tier-1 is a retirement account, while Tier-2 is a voluntary account. While opening the account, you have to invest Rs 500 in Tier 1. After this, you have to put Rs 1000 in Tier 2. You have to make this contribution in every financial year under all circumstances. You can withdraw 60 per cent of the total amount deposited in NPS in a lump sum at the time of retirement, while the remaining 40 per cent amount goes to the pension scheme. There is no limit on investment in NPS. The higher the annuity amount of 40 per cent, the better will be your pension in old age.