Income Taxpayers will soon be disallowed from the beneficiary bracket of the Atal Pension Yojana (APY). A notification from the Ministry of Finance announced, "Any citizen who is or has been an income-tax payer, shall not be eligible to join APY." The rule will come into effect on October 1, 2022.
To rule out any form of misunderstanding the notification also highlights who is the income taxpayer as the government of India, “A person who is "liable to pay income tax in accordance with the Income Tax Act, 1961, as amended from time to time."
The beneficiaries enrolled in the scheme will cease to be a part of it with effect from October 1st. However, the money they are liable to receive will be deposited into their respective bank accounts.
“In case a subscriber, who joined on or after October 1, 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 order said.
The scheme was launched by the incumbent BJP government through their Annual Budget in 2015. The scheme provides a monthly pension to those registered ranging from 1,000 to 5,000. They also need to contribute between the age of 18 to 40.
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The scheme brochure reads to enroll as the beneficiary, "To address the longevity risks among the workers in unorganized sector and to encourage the workers in unorganized sector to voluntarily save for their retirement."
The scheme is administered under the Pension Fund Regulatory and Development Authority (PFRDA) in India. As per the government records the National Pension Scheme and Atal Pension Yojana have a combined over 53 million subscribers with an accumulated Rs 7 trillion in it.