New rules for opening an Atal Pension Yojana (APY) account in 2022
The Union government has changed the terms and conditions to open an Atal Pension Yojana (APY) account. The scheme is named after the former Prime Minister of India, Atal Bihari Vajpayee. This scheme offers a guaranteed minimum pension of Rs 1000 to Rs 5000 per month to the registered subscribers after they complete the age of 60. The amount of pension depends on the contribution made by the individual.
However, everyone cannot open an APY account.
Here are the five things you have to know before opening an APY account
Taxpayers are prohibited from opening Atal Pension Yojana (APY) account
People who pay tax or file income tax returns are not allowed to open an Atal Pension Yojana (APY) account effective from October 1, 2022.
According to a notification released on August 10, 2022, by the Department of Financial Services under the Ministry of Finance, any citizen that is or has been paying income tax shall not be eligible to claim APY from October 1, 2022.
Consequences of opening an APY account on or after October 1
According to the notification, if an individual opens an Atal Pension Yojana (APY) account on or after October 1 and is subsequently found to be an income tax payer on or before the notified date then his/her account will be closed. The accumulated wealth from the pension of that individual would be returned.
The notification notified that in any case, if a subscriber who joined Atal Pension Yojana (APY) on or after October 1, 2022, is subsequently found to have been paying income tax on or before the date of application then, the account should be closed and the accumulated wealth from pension till date would be returned.
Option for taxpayers
Tax Paying individuals who want to have an Atal Pension Yojana (APY) account can join this scheme before October 1, 2022, and can enjoy the benefits of this scheme till September 30, 2022. After this date, the taxpayer’s APY account will become invalid.
Do tax-paying individuals need an APY account?
Generally, Atal Pension Yojana (APY) accounts are for low-income groups and individuals who do not have access to any other pension schemes that offer guaranteed pensions after retirement. The minimum assured pension under this scheme varies from Rs 1000 to 5000 per month.
However, taxpayers who want a higher pension amount after retirement can join schemes like the National Pension System (NPS). Another good option for taxpayers is to join schemes like the Public Provident Fund (PPF) which offers high guaranteed and tax-free returns.
Eligibility Criteria for having an APY account
For now, Indian citizens between the ages of 18 to 40 are eligible to avail the benefits of the Atal Pension Yojana (APY). An individual can apply for this scheme through the bank and post office branches where they have their savings accounts. As per the official data, the total number of APY subscribers at the end of March 2022 was 4.01 crore.