New Delhi: Income tax payers are no longer allowed to join Atal Pension Yojana (APY) scheme. The Ministry of Finance has now decided not to allow income taxpayers to apply for the Atal Pension Yojana (APY) scheme effective from October 1, 2022.
According to the gazette notification issued by the Ministry of Finance on August 10, any citizen who 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. However the pension amount or the accumulated pension wealth that has been deposited till that time will be refunded in one go.
Read More: UIDAI update: Know how to apply for Aadhaar PVC card without registered mobile number
Launched on May 9, 2015 by Prime Minister Narendra Modi, the APY aims at delivering old age income security particularly to the workers in the unorganised sector. APY can be subscribed by any Indian citizen in the age group of 18-40 years having a bank account. APY is a government scheme administered by PFRDA through NPS architecture.
Meanwhile, for those who cannot join the Atal Pension Yojana (APY) scheme, there are other government schemes that are equally a good choice for building a pension corpus. These two schemes can be your preferred option if you have a long term window and want to build a big investment corpus for your retirement fund.
National Pension System (NPS)
Any individual citizen of India (both resident and Non-resident) in the age group of 18-65 years (as on the date of submission of NPS application) can join NPS. Although, opening multiple NPS accounts for an individual is not allowed under NPS, an Individual can have one account in NPS and another account in Atal Pension Yojna.
Any individual citizen of India (both resident and Non-resident) in the age group of 18-65 years (as on the date of submission of NPS application) can join NPS. But, don’t be confused with joint account. National Pension System account can be opened only in individual capacity and cannot be opened or operated jointly or for and on behalf of HUF.
Read More: Have you sent money to wrong account? Don’t worry! Here’s HOW to get it back
An additional deduction for investment up to Rs 50,000 in NPS (Tier I account) is available exclusively to NPS subscribers under subsection 80CCD (1B). This is over and above the deduction of Rs 1.5 lakh available under section 80C of Income Tax Act 1961.
Public Provident Fund (PPF)
PPF Scheme was introduced by the National Savings Organization in 1968 was aimed at making small savings a lucrative investment option. If you choose your tenure wisely, PPF in the long term will yield very good returns. Public Provident Fund currently offers an interest rate of 7.1 percent. A minimum of Rs 500 and a maximum of Rs 1.5 lakh per annum can be deposited every year in a PPF account at present. Deposits can be done maximum in 12 transactions.
A PPF account matures in 15 years, after which you can either withdraw all your money or extend the PPF account for a block of 5 years each.
