The Centre has barred income taxpayers from availing the Atal Pension Yojana (APY) from October 1 this year to ensure the scheme’s benefits reach the disadvantaged.
Atal Pension Yojana, launched in 2015, is a social security scheme for citizens aged 18-40. Subscribers receive a guaranteed pension of Rs 1,000 to Rs 5,000 per month after attaining the age of 60, depending upon their contributions.
For subscribers who join the scheme on or after October 1, 2022, and are income taxpayers, their APY account shall be closed and accumulated pension wealth to date would be given to the subscriber, said the government.
As there is an element of subsidy or commitment to pay a subsidy involved in the scheme, the view is that it should benefit the poor and underprivileged, said a government official. The idea is to discourage those who can afford a pension plan themselves from availing of the scheme.
Since the government guarantees assured returns through the scheme, a low-interest rate regime in the future may increase its burden for gap funding, he said.
The contribution to the scheme can be made monthly, quarterly, or on a half-yearly basis. In case of death of the person, the spouse will receive the pension and on the death of both, the pension corpus will be returned to the nominee.