Neural tissue engineering aims at producing a simulated environment using a matrix that is suitable to grow specialized neurons/glial cells pertaining to CNS/PNS which replace damaged or lost tissues. The primary goal of this study is to design a compatible scaffold that supports the development of neural-lineage cells which aids in neural regeneration. The fabricated, freeze-dried scaffolds consisted of biocompatible, natural and synthetic polymers: gelatin and polyvinyl pyrrolidone. Physiochemical characterization was carried out using Fourier Transform Infrared Spectroscopy (FT-IR) and Scanning Electron Microscopy (SEM) imaging. The 3D construct retains good swelling proficiency and holds the integrated structure that supports cell adhesion and proliferation. The composite of PVP-gelatin is blended in such a way that it matches the mechanical strength of the brain tissue. The cytocompatibility analysis shows that the scaffolds are compatible and permissible for the growth of both stem cells as well as differentiated neurons. A change in the ratios of the scaffold components resulted in varied sizes of pores giving diverse surface morphology, greatly influencing the properties of the neurons. However, there is no change in stem cell properties. Different types of neurons are characterized by the type of gene associated with the neurotransmitter secreted by them. The change in the neuron properties could be attributed to neuroplasticity. The plasticity of the neurons was analyzed using quantitative gene expression studies. It has been observed that the gelatin-rich construct supports the prolonged proliferation of stem cells and multiple neurons along with their plasticity.