From October 1, income tax payers won’t be able to sign up for the government’s Atal Pension Yojana (APY) social security program. The goal, according to the finance ministry, is to better focus pension benefits to disadvantaged demographic groups.
According to the notification, ““Provided that from 1st October,2022, any citizen who is or has been an income-tax payer, shall not be eligible to join APY.”
“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.”
What is Atal Pension Yojana
On June 1, 2015, the government implemented APY to offer social security to workers, mostly in the unorganised sector. After turning 60, program participants receive a guaranteed minimum pension ranging from Rs 1,000 to Rs 5,000 per month, based on their contributions.
The plan also allows a subscriber to adjust their pension amount once a year while it is still in the accumulation period.
The spouse of the subscriber will be entitled to the same amount of pension till their death in the event of the subscriber’s death. Additionally, the nominee will be eligible to collect the pension funds that the subscriber had accumulated up until the age of 60 after the deaths of both the subscriber and his or her spouse.
Who is an income tax payer
According to the notification dated August 10, 2022, “For the purpose of this clause, the expression “income-tax payer” shall mean a person who is liable to pay income-tax in accordance with the Income Tax Act, 1961, as amended from time to time.”.