Home/ Money / Personal Finance/  Taxpayers will not be able to join APY scheme from 1 Oct. How to open the account

Income taxpayers will not be eligible to join Atal Pension Yojana (APY) scheme from October 1, 2022, as per the guidelines of the Finance Ministry. APY is a scheme focused on Indian citizens in the unorganised sector workers. The scheme offers a guaranteed minimum pension of 1,000, 2,000, 3,000, 4,000, and 5,000 per month at the age of 60 years. However, the minimum guaranteed pension depends upon the contributions of the subscribers. The age group between 18 years to 40 years is eligible to subscribe to APY.

With the October 1 deadline nearing, taxpayers who are looking to join APY now have only 5 days in their hands to subscribe to the scheme.

Earlier, in August, the FinMin in its notification said, "Provided that from 1st October 2022, any citizen who is or has been an income-tax payer, shall not be eligible to join APY."

A taxpayer shall mean a person who is liable to pay income tax in accordance with the Income Tax Act, 1961, as amended from time to time.

Further, in the notification, the ministry said, "In case a subscriber, who joined on or after 1st October 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."

The scheme acts as a pension in your retirement after 60 years of age.

Among some of the benefits of APY is -- that the scheme provides citizens the benefit of monthly income when they are no longer earning. Further, under the scheme, if f the actual realized returns on the pension contributions are less than the assumed returns for minimum guaranteed pension, throughout the contribution period, then such shortfall shall be funded by the government. Also, if the actual returns on the pension contributions are higher than the assumed returns for minimum guaranteed pension, throughout the contribution period, such enhanced scheme benefits shall be passed on to the subscribers.

Indian citizens between the age group of 18 to 40 years are eligible to join the scheme. They can subscribe to APY via a bank branch/post office via online or offline mode. It is mandatory in the scheme to provide nomination and spouse details in the APY account.

Under the scheme, contributions can be made on a monthly or quarterly, or half-yearly basis via a debit facility from a savings bank account.

How to open an APY account

- A citizen will have to approach the bank branch where the individual’s savings bank account is held.

- Secondly, then you will have to fill up the APY registration form.

- Provide necessary details like a bank account, Aadhaar number, and mobile number among other details. For enrolment, Aadhaar is the primary KYC document for the identification of beneficiaries, spouses, and nominees to avoid pension rights and entitlement-related disputes in the long term.

- Once the APY account is opened, ensure to keep the required balance in the savings bank account for the transfer of monthly contribution.

It needs to be noted that multiple APY accounts are not permitted.

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Updated: 25 Sep 2022, 08:49 AM IST
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