Income tax payers barred from enrolling in Atal Pension Yojana from Oct 1, 2022.
What is APY? What changes have been made?
Keep reading to know more...
WHAT IS ATAL PENSION YOJANA (APY)
On 9th May 2015, Prime Minister launched the APY scheme for the citizens of India who works in the Unorganised Sector. APY is also known as ‘Swavalamban Yojana’. APY is a government-backed pension scheme. It is primarily focused on the unorganized sector. Subscribers of the scheme get a minimum guaranteed pension of ₹1,000 to ₹5,000 per month after attaining 60 years of age depending on their contributions.
CURRENT SCENARIO – WHO IS ELIGIBLE FOR APY?
To qualify, the subscriber must fall within the 18–40 age group. This suggests that the minimum time of contribution is 20 years, following which the subscriber can start receiving a monthly pension.
To enable monthly contributions, the subscriber must have an active bank account that complies with KYC requirements and must keep a minimum amount in the account that is adequate to enable monthly debit of their payment.
Should not be a recipient of any other equivalent social security program.
The candidate should not be a part of any program offered by the employer or another one that provides for a guaranteed monthly pension after retirement.
Should make sure to maintain a consistent monthly contribution until reaching retirement age. Any lapses in the submission of monthly payments could lead to the closure of the account under this scheme.
REVISED SCENARIO – WHO REMAINS ELIGIBLE FOR APY?
The regulations for the Atal Pension Yojana (APY) have been altered by the government. This has brought about a Major Change. Any citizen who is or has ever been an income taxpayer is no longer eligible to join the pension plan as of October 1, 2022. According to a statement from the finance ministry, an APY account may be canceled if an investor who pays income tax enters the APY scheme on or after October 1, such APY account will be closed and the subscriber's accumulated pension wealth will be given to him or her, according to the notification.
BUT, WHY INVEST IN APY?
APY has certain benefits for its subscribers, one of the advantages of the Atal Pension Yojana is that private sector employees can enroll in the program as well. Subscribers have the option of choosing their contribution amount, which also influences their return amount. When you reach the age of 60, you will be eligible for a guaranteed pension of 1,000/-, 2,000/-, 3,000/-, 4,000/-, or 5,000/-. The pension amount will be provided to the nominee or spouse in the event of the subscriber's death. Additionally, Section 80CCD of the Income Tax Act of 1961 entitles you to a tax benefit.
This was a quick blog on changes introduced in the eligibility criteria of the Atal Pension Yojana.
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