Atal Pension Yojana Tax Benefits and Exemptions

 

Atal Pension Yojana Tax Benefits and Exemptions

Atal Pension Yojana, popular by its acronym APY is a social security scheme launched by current NDA government led by PM Narendra Modi. To some extent it can be called as a flagship program because it intends to offer social security to people employed in the unorganized sectors with no access to pensions. Absence of pension can eventually lead to catastrophic financial break down.

Under this scheme people belonging to the unorganized sector can make a monthly contribution towards the scheme until they attain the retirement age of 60. After that age, they will be given a guaranteed monthly pension. However, there are some limitations.

Tax Benefits in Atal Pension Yojana

  1. A person will not be allowed to enter the scheme if he or she is under the age of 18 years.
  2. A person will not be allowed to enter the scheme if he or she is above the age of 40 years.
  3. The monthly contribution allowed cannot fall below ₹ 42.
  4. The monthly contribution allowed cannot exceed ₹ 1,454.
  5. A person cannot open more than one APY account.
  6. A person can be allowed to select a pension slab while applying. However, this slab can later be changed by increasing the monthly contribution.
  7. There will be penalty in case a person fails to pay the monthly contribution within specified time frame.

Atal Pension Yojana Tax Exemption

Updated on 23rd Feb 2016

Initially there was no tax exemption on the premium amount paid in Atal Pension Yojana scheme. But a recent circular from Income tax department says that APY would have same benefits as NPS this means that premium amount paid can be claimed under section 80CCD. Current Limit for 80CCD tax exemption is rs 50 thousand.

Other Articles

  1. Age Limit
  2. Eligibility
  3. APY Status
  4. APY vs NPS