NPS Vatsalya Scheme Guidelines 2025

PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY

Circular

Circular No. PFRDA/2026/02/NPS-Vatsalya/01

07th January, 2026

To, All Stakeholders under NPS

Subject: NPS Vatsalya Scheme Guidelines 2025

"NPS Vatsalya" Scheme was launched by the Hon'ble Finance Minister in the Union Budget of FY 2024-25 as a plan for contribution by parents and guardians for minors, marking a significant advancement in financial planning and setting a new standard for prudent financial management from a young age. Aligned with the goal of ‘Vikasit Bharat 2047’, NPS Vatsalya aims not only to secure the future of its young subscribers but also to underscore the importance of nurturing a culture of savings from an early age.

2. In pursuance of the announcement, PFRDA issued NPS Vatsalya Scheme Details vide circular no. PFRDA/2024/16/PDES/01 dated 18th September, 2024.

3. NPS Vatsalya Scheme is defined as a Specific Purpose Scheme as per Regulation 4A of PFRDA (Exit and Withdrawals under NPS) Regulations, 2015, which shall be governed by the guidelines issued by the Authority in respect of such scheme.

4. Therefore, PFRDA, in supersession of circular no. PFRDA/2024/16/PDES/01 dated 18th September, 2024, hereby issues “NPS Vatsalya Scheme Guidelines 2025”. The Guidelines shall come into effect from the date notified by the Authority after building the necessary system capabilities.

5. This circular is being issued in exercise of the powers conferred under Section 14 of the Pension Fund Regulatory and Development Authority Act, 2013.

Yours sincerely,

Kavita Singam Xavier General Manager

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PENSION FUND REGULATORY AND DEVELOPMENT AUTHORITY

NPS VATSALYA SCHEME GUIDELINES – 2025

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1. Background - NPS Vatsalya

i. In the Union Budget Speech for FY 2024-25, the Hon’ble Union Minister for Finance and Corporate Affairs mentioned- “107. NPS-Vatsalya, a plan for contribution by parents and guardians for minors will be started. On attaining the age of majority, the plan can be converted seamlessly into a normal NPS account.”

ii. In the PFRDA 120th Board Meeting, the Authority approved the implementation of Budget Proposal - Introduction of NPS Scheme for Minors - NPS Vatsalya.

iii. The Hon’ble Union Minister for Finance and Corporate Affairs, Smt. Nirmala Sitharaman launched the National Pension System Vatsalya (NPS Vatsalya) scheme on 18th September, 2024.

iv. PFRDA has issued guidelines on NPS Vatsalya on 18th September, 2024, and it was decided to amend the PFRDA (Exit and Withdrawals under NPS) Regulations, 2015 to provide for the modalities of exit and withdrawals pertaining to NPS Vatsalya.

v. The amendments to PFRDA (Exit and Withdrawals under NPS) Regulations, 2015 have been carried out and notified on 12th December, 2025. Reference is drawn to Regulation 4A of the referred regulations and which states as following: “4A. Exit and withdrawal in case of specific purpose scheme under the National Pension System. - Notwithstanding anything contained in these regulations, an individual subscribing to any specific purpose scheme under the National Pension System shall be governed by the guidelines issued by the Authority in respect of such scheme. Such guidelines shall include the scheme features, the terms of exit and withdrawal and such other stipulations in respect of each of such scheme.”

vi. For NPS Vatsalya, being a specific purpose scheme for minors and in terms of the above-referred Regulation 4A of the PFRDA (Exit and Withdrawals under NPS) Regulations, 2015, these guidelines are hereby issued covering the scheme features, the terms of exit and withdrawals and other related provisions. The primary objective of these guidelines is to bring clarity and provide comprehensive information on the NPS Vatsalya scheme to all stakeholders and subscribers.

2. Objectives - NPS Vatsalya

i. NPS Vatsalya scheme is designed specifically for minors to nurture the culture of saving from an early age, introduce minors to financial literacy and financial planning, strengthen the concept of long-term financial security and prudent financial management.

ii. NPS Vatsalya objective is to secure the future of its young subscribers by creating wealth from an early age so as to empower the young subscribers, to create a pensioned society, emanating from the vision of "Viksit Bharat@2047" while at the same time providing for partial withdrawals to meet contingency requirements till the attainment of age of 18 years.

3. Preliminary

3.1 Short Title and Commencement

a. These guidelines shall be called the ‘NPS Vatsalya Scheme Guidelines 2025’. b. These guidelines incorporate, consolidate and update the guidelines, instructions and circulars and relevant regulations issued by the Authority on the subject. c. These guidelines shall come into effect from the date notified by the Authority after building the necessary system capabilities.

4. Applicability

i. The “NPS Vatsalya” (hereinafter called “the scheme”) was launched on 18th September, 2024 and is covered under section 12(1)(a) and section 20 of the Pension Fund Regulatory and Development Authority Act, 2013.

ii. The scheme is regulated by Pension Fund Regulatory and Development Authority (PFRDA) in accordance with the provisions of PFRDA Act, 2013, regulations and guidelines issued from time to time.

iii. It is a contributory saving cum long-term financial security scheme designed exclusively for minors for the purposes of enhancing financial literacy and financial planning with an objective to encourage empowerment of children, and to create a pensioned society, aligned with the vision of "Viksit Bharat@2047".

5. Definitions

5.1 In these guidelines, unless the context states otherwise, the terms herein shall bear the meanings assigned to them as below:

i. The “Account” shall mean an individual pension account of a minor opened through a guardian under the “NPS Vatsalya” scheme.

ii. The “Subscriber” for the purpose of this scheme shall mean a minor for whom the account has been opened under the scheme.

iii. The “Guardian” shall mean either the parent of a minor or a legal guardian.

iv. The “Minor” shall mean a person who has not reached the age of eighteen years.

6. Eligibility for Joining and allied conditions

i. The scheme is available to all Indian citizens who are aged below the age of 18.

ii. Non-Resident Indians (NRIs) and Overseas Citizens of India (OCIs) under 18 years of age can join the scheme.

iii. Parents or legal guardians can open and manage the NPS Vatsalya account on behalf of the minor.

iv. The Nominees for the account will be either the parent or a guardian, ensuring that they are the point-of-contact for all account related concerns until the child turns 18.

v. While the parents or guardians manage the account, the child is the sole beneficiary of the NPS Vatsalya account. All contributions, returns and benefits accrued from the scheme will be for the child’s future financial security.

vi. The management rights will only be transferred after the completion of the required KYC process to the subscriber, post completion of 18 years as beneficiary.

vii. Upon transitioning, the features, benefits, and exit norms of the NPS-Tier I for All Citizen Model of NPS will apply.

7. Operational Framework of the Scheme

i. The account shall be opened under the scheme by the guardian in the name of the minor, who shall be the sole beneficiary.

ii. The account shall be operated by the guardian for the exclusive benefit of the minor until the attainment of the age of majority (18 years).

iii. Upon the attainment of the age of 18 years, the subscriber shall be required to complete the fresh KYC, furnish nominee(s) details and conform to such other requirements as may be stipulated by the PFRDA. Until such details are furnished and verified in the system, no subsequent transactions shall be allowed till the subscriber attains the age of 21 years, post which the account shall become dormant.