The government has restricted income taxpayers from investing in Atal Pension Yojana (APY) or Atal Pension Scheme (APS) from today i.e. October 1, 2022.
Here are key things to know about the new ruling and Atal Pension Yojana (Yojana):
What will happen to the existing APY investors who are taxpayers?
The existing APY investor can continue to claim income tax deduction on the investments made in the scheme.
Adhil Shetty, CEO at BankBazaar.com said that the notification does not have any details on income tax implications for the contribution made to the APY scheme. So, until it is applied retrospectively, existing subscribers should be able to continue to invest and avail tax benefits.
What is the eligibility criteria for opening APY?
APY can be subscribed by any Indian citizen in the age group of 18-40 years having a bank account. Therefore, minimum period of contribution by the subscriber under APY would be 20 years or more.
What are the tax deductions one can claim on APY?
Maximum deduction allowed under section 80CCD (1) of the Income Tax Act, 1961 is 10 percent of gross total income subject to maximum deduction of Rs 1.5 lakh. An additional contribution of Rs 50,000 is eligible under section 80CCD (1B) of the Income Tax Act, 1961.
Maximum deduction allowed under section 80CCD (1) of the Income Tax Act, 1961 is 10 percent of gross total income subject to maximum deduction of Rs 1.5 lakh. An additional contribution of Rs 50,000 is eligible under section 80CCD (1B) of the Income Tax Act, 1961.
What are the benefits of APY?
This scheme offers a guaranteed pension of Rs 1,000 to Rs 5,000 per month, depending on the contributions made on attainment of 60 years of age.
The same pension would be paid to the subscriber's spouse after the subscriber's demise, and on the demise of both the subscriber and spouse, the pension wealth accumulated until age 60 of the subscriber would be returned to the nominee.
To subscribe to APY, subscribers can either visit bank branch/post office or enroll through online mode. The
APY form can be filled online by furnishing bank account number, phone number registered with Aadhaar and the Aadhaar number.
How can one make contributions?
Under the scheme, contributions can be made monthly, quarterly, or half-yearly via a debit facility from a savings bank account.
First Published: Sept 30, 2022 5:38 PM IST
