PFRDA Seeks Tax Breaks for Contribution Made in Atal Pension Yojana
The regulator of pension fund PFRDA has send written request to the Central Board of Direct Taxes (CBDT) and Centre to seek tax breaks for those who are making contributions in the Atal Pension Yojna (APY). This was elucidated by the regulatory body to the stake holders and banks on Thursday, 2nd October, 2015 in Thiruvananthapuram, in a session.
The chairman of PFRDA, Heman Contractor, told BusinessLine, that banks will play a great role in the popularization of APY, which is an exclusive social security scheme in India for the unorganized sector.
He further adds that he do not anticipate any such impediment on pushing the product by banks. He says that the only question is to make people aware of the benefits of the scheme by talking to them and explaining them the advantages of the scheme. Although, he adds that to it will take time to reach out to people and generate numbers.
APY is the Indian government scheme to provide a defined pension focusing on unorganized sector on the country. The age limit of subscribing to the scheme is between eighteen to forty years. The pension amount varies between rupees one thousand to five thousand. The defined pension depends not only on the contribution but also the age at which the beneficiary is subscribed to the scheme.
Many people feel uncomfortable with making a contribution for such an extended period of time in this scheme. However, Contractor says that the benefits of such forced saving has to be explained to the potential subscribers. This is always helpful in the longer term but it takes time to make people understand about its good value.
He further adds that the challenge that the scheme is facing right now is that the banks are always short of human resource and time. He says that the uniqueness of the product is its best quality and there are no other equivalent products in the market which can outdo this scheme. He maintains that this is one of the most important reasons to make sure that the product is sold in the market.
He urges that the banks have the ability to do a lot when it comes to selling this product. They have a presence almost everywhere and they provide services to all groups of people. He adds that if the banks move ahead with proper planning and focus, they will have no trouble in selling APY Scheme to the potential subscribers. He adds that Kerala can be the initiator and trendsetter as it has an effecting banking system, and some of the banks are already doing remarkably well with APY.