Would you like to create NPS Vatsalya for your kids?
I am a representative of HDFC Pension. I have an activity to complete. I need to understand why parents are not choosing NPS Vatsalya for their kids.
To brief everyone else,
NPS Vatsalya is a govt. Of India initiated scheme for the kids from age 0-18. It is market linked giving it higher growth potential as compared to Sukanya Samriddhi Yojana. Moreover this is for both boy and girl child.
When comparing with mutual funds, first thing is lower fund management cost, which is on average 0.30 %. Another benefit over mutual funds is the tax that one needs to pay on withdrawal. For Mutual funds, one needs to pay LTCG(12.5%) when gains exceed 1.5 L after one year of keeping it invested.
In NPS Vatsalya, the whole amount at withdrawal remains tax free, as there is no income of child. If corpus is less than 8L, one can get 100% lumpsum. If it is greater than 8L, the upto 80% can be taken as lumpsum taxfree and remaining 20% will act as Pension for life for the child.
If there is no exit till 21, then this account will transition to Tier 1 NPS Account of the child.
For old tax regime, under section 80ccd1(b), the parents can also get maximum 50000 tax deductions (apart from corporate contribution towards nps)
I think if I can engage more audience, maybe that will help in this. How can I reach more schools or daycare centers to conduct a session for nps vatsalya for the parents?