As per the latest updates, those who pay income tax will not be allowed to register in the pension security scheme by the government.
The pension security in question is the Atal Pension Yojana (APY), and this will be effective from October 1.
Tax Payers Cannot Enrol In Atal Pension Yojana: Finance Minister
This was announced by the finance ministry in a notification. In fact, the department of financial services under the finance ministry tweeted that this modification has been introduced to target pension benefits better to underserved segments of the population.
As per the tweet by the finance ministry, “From October 1, any citizen who is or has been an income-tax payer, shall not be eligible to join APY. Effective in prospective manner from October 1, income-tax payer enrolled before October 1 to continue in the scheme.”
The notification clarified that the term “income-tax payer” refers to anyone who is required to pay income tax under the Income-Tax Act of 1961, as amended from time to time.
According to the gazette notification, if a subscriber who joined on or after October 1, 2022 is later discovered to have been an income-tax payer on or before the date of application, the APY account will be closed and the accumulated pension wealth will be given to the subscriber.
Earlier this month, in response to a Rajya Sabha question, Minister of State for Finance Bhagwat Karad stated that as of July 21, approximately 4.31 crore subscribers had enrolled under the scheme.
What is Atal Pension Yojana?
APY is a voluntary, periodic contribution-based pension scheme in which the subscriber receives the pension when he or she reaches the age of 60.
Each subscriber to the Atal Pension Yojana will receive a monthly minimum pension of $1,000-5,000 from the Central Government after the age of 60 until death, depending on the contribution chosen.
The Atal Pension Yojana (APY) is the Government of India backed pension scheme in India primarily for workers under the unorganized sector. Under this scheme, after a person turns 60, he/she gets Rs 1000 to Rs 5000 pension every month which is fixed on the basis of premiums.
The special feature with this scheme is that you get an income tax rebate on whatever you invest in it.
The workers from the unorganized sector can get a guaranteed pension by investing in it.
If they have an account in the State Bank of India (SBI), they can invest in this scheme online while sitting at home. Joining APY has become easy because of net banking.