Hey there! Big news for folks with old National Savings Scheme (NSS) accounts! The 2025 Budget has brought a welcome change. If you have an NSS-87 or NSS-92 account, you can withdraw your money without any penalty after August 29, 2024. Finance Minister Nirmala Sitharaman explained that many senior citizens have these old accounts that aren’t earning interest anymore, so this exemption will be a real help.
For those unfamiliar, the National Savings Certificate (NSC) is a popular government savings scheme, especially among middle and lower-income groups. It’s available at post offices and even offers tax benefits under Section 80C of the Income Tax Act.
Now, let’s talk pensions! There’s a significant update regarding NPS Vatsalya. Parents or guardians contributing to this scheme will now get a tax exemption, up to ₹50,000. Keep in mind, this applies only to the old tax regime. Also, any amount received by the minor due to the account’s closure (because of the minor’s death) won’t be considered the parent’s or guardian’s income, so no tax there either.
NPS Vatsalya allows partial withdrawals for things like the child’s education, treatment of specific illnesses, or disability (over 75%). Importantly, any withdrawal (up to 25% of the total contribution) won’t be added to the parent’s or guardian’s income. These new rules kick in on April 1, 2026.
Remember, Finance Minister Sitharaman introduced NPS Vatsalya in the 2024 Budget, and it officially launched on September 18, 2024. It lets parents invest in the National Pension Scheme (NPS) for their kids, securing their financial future and promoting saving habits. The whole point is long-term financial security and encouraging kids to save from a young age.
This children’s welfare scheme just got a boost! The Budget proposes increasing tax benefits under Section 80CCD(1B).
