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Taxpayers can’t join Atal Pension Yojana

Atal Pension Yojana was launched in 2015 to create a universal social security system for the citizens, especially the poor, the under-privileged and the workers in the unorganised sector. (Photo: iStock)Premium
Atal Pension Yojana was launched in 2015 to create a universal social security system for the citizens, especially the poor, the under-privileged and the workers in the unorganised sector. (Photo: iStock)

Launched in 2015, Atal Pension Yojana is administered by the Pension Fund PFRDA. It is currently open to all bank account holders in the age group of 18 to 40 years and contributions differ, based on pension amount chosen. Subscribers would receive guaranteed minimum monthly pension at the age of 60

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NEW DELHI : Income tax payers will not be eligible for the Atal Pension Yojana (APY), a universal social security scheme, from 1 October, according to an official order.

A notification issued by the finance ministry said that from 1 October, any citizen who is or has been an income-tax payer, shall not be eligible to join the scheme.

In case a subscriber of the scheme, who joined on or after 1 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, as per the order.

For this, an income tax payer would mean a person liable to pay income tax as per the Income Tax Act as amended from time to time.

The move to restrict the scope of beneficiaries is part of the government’s efforts to better target welfare measures to the needy. Over the last few years, the government’s effort has been to wean off the economically well off from welfare schemes, so that funds reach intended beneficiaries more effectively. This has also been a suggestion given by the Fifteenth Finance Commission.

Atal Pension Yojana was launched in 2015 to create a universal social security system for the citizens, especially the poor, the under-privileged and the workers in the unorganised sector. It is administered by the Pension Fund Regulatory and Development Authority (PFRDA). It is currently open to all bank account holders in the age group of 18 to 40 years and the contributions differ, based on pension amount chosen. Subscribers would receive guaranteed minimum monthly pension at the age of 60.

The monthly pension would be available to the subscriber, and the spouse, on the death of the subscriber, and after their death, the pension corpus, as accumulated at age 60 of the subscriber, would be returned to the nominee of the subscriber, as per information provided by the department of financial services.

In case of premature death of a subscriber,the spouse can continue to contribute to the account of the subscriber for the remaining vesting period, till the original subscriber would have attained the age of 60, the department explained. The minimum pension would be guaranteed by the government.

The department explained that if the accumulated corpus based on contributions earns a lower than estimated return on investment and is inadequate to provide the minimum guaranteed pension, the central government would fund the inadequacy. If the return on investment is higher, subscribers would get enhanced pensionary benefits, the department said.

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