Atal Pension Yojana

In News

• Recently, a gazette notification issued by the Ministry of Finance stated that Income tax payers will soon be disallowed to be a part of the Atal Pension Yojana (APY). 

About the recent decision

• Eligibility: Any citizen, who is or has been an income-tax payer, shall not be eligible to join APY.
  • the rule will come into effect on October 1, 2022.
  • However, they will receive the money accumulated in their respective accounts. 
• Income tax-payer is a person who is liable to pay income-tax in accordance with the Income Tax Act, 1961, as amended from time to time.

Atal Pension Yojana (APY)

• Launched:
  • It was launched in 2015. 
• Aim
  • To provide social security for the people working in an unorganised sector as people working in such sectors mainly belong to a low-income group. 
• Eligibility:
  •  Any Indian citizen in the age group of 18-40 years having savings bank account/ post office savings bank account.
  • The co-contribution of the Government of India is available for 5 years &  for those who are not covered by any Statutory Social Security Scheme and are not income tax payers.
• Administrated By: 
  •  Pension Fund Regulatory and Development Authority (PFRDA).
• Coverage
  • The Scheme has been implemented comprehensively across the country covering all states and Union Territories. 
  • Atal Pension Yojana (APY) is open to all bank account holders who are not members of any statutory social security scheme. 
• Guaranteed pension
  • Under this social security scheme, a subscriber receives a minimum guaranteed pension of 1000 to 5000 per month from the age of 60 years, depending upon his contribution. 
  •  
  • The same pension would be paid to the spouse of the subscriber after the demise of subscriber and on demise of both the subscriber and spouse, the pension wealth as accumulated till age 60 of the subscriber would be returned back to the nominee.  

Benefits of APY

• Old age people: APY will help benefit the people of old age.
• Source of income: The scheme will help in providing income to the people who have very little sources of income. 
• Fixed pension: the contribution levels would vary and would be low if subscriber joins early and increase if he joins late.
• Eligible for tax benefits: Contributions to the Atal Pension Yojana (APY) are eligible for tax benefits similar to the National Pension System (NPS).

Source: BS