APY: Big change in Atal Pension Yojana for taxpayers! Here’s how new rule will impact savings

New Delhi: The Central government has brought a few changes to the Atal Pension Yojana, which was started with the aim of providing pension facilities to those working in the unorganised sector in 2015. And as a result, the Ministry of Finance has now decided not to allow income taxpayers to apply for the APY scheme. The new order issued by FinMin will come into effect from October 1, 2022.

According to the gazette notification issued by the Ministry of Finance on August 10, any citizen who is or has been an income tax payer according to the Income Tax Act will not be eligible to join the Atal Pension Yojana from October 1, 2022. (ALSO READ: Big jolt to borrowers! Bank of Baroda hikes lending rates, check details) 

 

According to the new provision, if one has joined the scheme on or after October 1 and is found to be an income tax payer on or before the date of coming into force of the new rule, his/her account will be closed immediately and the pension amount deposited till that time will be refunded in go. (ALSO READ: Beware! Petrol pump dealership offers arriving on messages, calls could be scam, check details) 

 

“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 ministry said in a notification. The Central government is expected to review them from time to time.

Atal Pension Yojana Entry Rules 

According to the current Atal Pension Yojana rules, any Indian citizen aged between 18-40 and having a savings account with any bank or post office can apply for the scheme. 

However, with the new rule in place, income taxpayers won’t be able to participate and invest in the scheme from October 1, 2022.