Income tax payers will not be allowed to enroll in the government’s social security scheme Atal Pension Yojana (APY) from October 1.
The finance ministry on Thursday said the move is to ensure better targeting of pension benefits to underserved sections of the population.
The government introduced APY on June 1, 2015, to provide social security to workers mainly in the unorganised sector. Subscribers of the scheme get a minimum guaranteed pension of Rs 1,000 to Rs 5,000 per month after attaining 60 years of age depending on their contributions.
”… from 1st October,2022, any citizen who is or has been an income tax payer, shall not be eligible to join APY,” the finance ministry said in a notification.
The ministry has modified its earlier notification on APY.
”From 01.10.2022 income tax payers shall not be eligible to join APY. Amendment in APY for better targeting of pension benefits to underserved section of population.
”Effective in prospective manner from 1st Oct. Income tax payer enrolled before 1st Oct to continue in the scheme,” the Department of Financial Services said in a tweet.
The department comes under the finance ministry.
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, the notification said.
Under the income tax law, people having taxable income of up to Rs 2.5 lakh are not required to pay income tax.
Currently, all Indian citizens between the age group of 18-40 years can join APY through bank or post office branches where one has the savings bank account.
The government had co-contributed 50 per cent of the total contribution or Rs 1,000 per annum, whichever is lower, to each eligible subscriber, who joined the scheme during the period from June 2015 to March 2016. It was also subject to the condition that the subscriber was not a beneficiary of any social security scheme and also not an income tax payer.
Those APY subscribers received the government’s co-contribution for a five-year period from 2015-16 to 2019-20.
More than 99 lakh APY accounts were opened during the last fiscal, taking the total number of subscribers to 4.01 crore at the end of March 2022.