Archive · 16 Sep 2026
NPS Vatsalya Rules Govern Withdrawals, Exits, and Account Conversion
NPS Vatsalya is a savings and pension account opened by an adult for a child under 18.
The child is the only beneficiary of the money.
A parent or guardian manages the account until the child becomes an adult.
At least ₹1,000 must be contributed each year.
Some money can be withdrawn after three years for reasons such as education, certain illnesses, or serious disability.
These withdrawals can be made no more than three times before the child turns 18.
When the child turns 18, they can leave the scheme or change it into a regular NPS account.
Usually, most of the money must then be used to buy an annuity that provides future payments.
If the balance is ₹2.5 lakh or less, or an annuity cannot be obtained, the entire amount may be withdrawn.
NPS Vatsalya is available to Indian citizens, NRIs, and OCIs under 18, with parents or guardians operating the account.
The scheme requires a minimum annual contribution of ₹1,000, while tax benefits apply to combined contributions of up to ₹2 lakh for the parent or guardian.
Partial withdrawals of up to 25% of contributions are allowed after three years, up to three times before the child turns 18.
At 18, the child can exit or convert the account into a regular NPS account after completing KYC within three months.
On exit, at least 80% of the corpus generally must purchase an annuity, except when the corpus is ₹2.5 lakh or less or no annuity is available.
- Who
- Children under 18 who are Indian citizens, NRIs, or OCIs, with parents or guardians operating their accounts.
- What
- NPS Vatsalya permits contributions, limited partial withdrawals, and exit or conversion to a regular NPS account at age 18.
- When
- The scheme was launched in September 2024; partial withdrawals require three years from joining, and KYC is required within three months of turning 18.
- Where
- The account is operated through the NPS system, with partial-withdrawal requests submitted through a Central Recordkeeping Agency portal.
- Why
- It is designed to build a pension corpus for minors while allowing specified withdrawals and a transition to regular NPS participation at adulthood.
- Regulator
- Pension Fund Regulatory and Development Authority (PFRDA)
- Minimum contribution
- ₹1,000 annually
- Tax-benefit limit
- Up to ₹2 lakh in combined deductions for the parent or guardian: ₹1.5 lakh under Section 80CCD(1B) and ₹50,000 as an additional deduction
- Partial withdrawal limit
- Up to 25% of the contributed amount after three years, available up to three times before age 18
- Age-18 option
- The beneficiary can exit or convert the account into a regular NPS account after completing KYC within three months
- Standard exit requirement
- At least 80% of the accumulated corpus must generally be used to purchase an annuity
- Full-withdrawal exceptions
- The entire corpus may be withdrawn if it is ₹2.5 lakh or less or if an annuity is unavailable from empaneled Annuity Service Providers