Income-tax payers will not be eligible to join the Atal Pension Yojana (APY) following an amendment in the scheme by the Finance Ministry.
“From October 1, 2022, any citizen who is or has been an income-tax payer, shall not be eligible to join APY,” a notification issued by the Ministry said.
APY is a Government of India scheme that was launched on May 9, 2015, and operationalised on June 1, 2015. It is open to all citizens of India between 18-40 years of age, having a savings account in a bank or post-office.
The notification further said: “In case a subscriber who joined on or after October 1, 2022, is subsequently found to have been an income-tax payer on or before the date of application, the APY account shall be closed and the accumulated pension wealth till date would be given to the subscriber.”
Initially, the Government had co-contributed 50 per cent of the total contribution or ₹1,000 per annum, whichever is lower, to each eligible subscriber who joined the scheme between June 1, 2015 and March 31, 2016, and who is not a beneficiary of any social security scheme and is not an income-tax payer. The Government’s co-contribution was given for five years from the financial year 2015-16 to the financial year 2019-20.
Since the condition of non-income tax payers was added for initial joiners, where the government is making a contribution, and there was no specific provision mentioned in the notification, it appears the government has included a new provision to make things clearer.
APY is a voluntary, periodic contribution-based pension scheme, under which the subscriber would receive pension at 60 years of age. Each subscriber will receive a Central Government guaranteed minimum pension ranging from ₹1,000 to ₹5,000 per month, after the age of 60 years until death, depending on the contribution chosen.
On the death of the subscriber, the same pension will be given to the spouse as the subscriber is guaranteed by the Government of India, until the death of the spouse. After the demise of both the subscriber and the spouse, the nominees of the subscriber will be entitled to receive the pension wealth, as accumulated till age 60 of the subscriber.
According to information received from the Pension Fund Regulatory and Development Authority (PFRDA), 4.32 crore subscribers were enrolled in the APY up to July 21, 2022.