Atal Pension Yojana (APY) is a contributory guaranteed pension scheme for Indian citizens. In today’s time, when there is no guaranteed pension available, APY offers a guaranteed pension of up to Rs 5,000 to its subscribers. The Pension Fund Regulatory and Development Authority (PFRDA) regulates both the contributory social security schemes in India:  the National Pension System (NPS) and APY.

Unlike NPS, APY offers a pre-determined pension to subscribers after they turn 60. The pension amount options are pre-determined, and the contribution amount is determined based on the pension income option selected and the applicant's age. One can choose from the pension options of Rs 1,000, Rs 2,000, Rs 3,000, Rs 4,000, and Rs 5,000. After the subscriber’s death, the same pension amount is continued for the subscriber’s spouse. After the death of the spouse, the total money accumulated in the subscriber’s account till the age of 60 is returned to the nominee.  

According to an October press release of PIB, the gross number of subscribers in APY has crossed seven crore with an enrolment of around 56 lakh in the financial year 2024-25.

APY is aimed to provide social security to people working in the unorganised sector and is available for all citizens meeting the eligible criteria. In current market conditions, many gig workers who are seasonally employed can benefit from the scheme if they meet eligibility criteria along with taxability criteria.

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Who Can Open APY Account?

• The person must be an Indian Citizen

• The applicant should be within 18 to 40 years of age

• The applicant must have a savings bank account so that the pension can be transferred to the account directly

• APY accounts can be opened with banks, post offices, and regional rural banks

Few Important Points:

According to the NPS trust website, “If you are or have ever been an income tax payer from 1st October 2022 onwards, then you will not be eligible to join the APY scheme.”

“In case you join the APY scheme on or after 1st October 2022, and it is later found out that you have been an income taxpayer on or before the date of application, then your APY account will be closed. You will receive all the wealth accumulated in your account until the date of closure”.

The date is important here because it can make a difference in whether an APY subscriber can open and hold an APY account or not. This is because if a person being a non-taxpayer opens an APY account on or after October 1, 2022, but is later found to have been paying income tax in the past (before applying for APY), the account will be closed.

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Can A Taxpayer Hold An APY Account?

On the question of the validity of APY account opening before October 1, 2022, where the subscriber was and still is a taxpayer, Bertram D'souza, Chief Product & Innovation Officer, Protean eGov Technologies Ltd, says, “Subscribers who have opened their accounts before October 1, 2022, won’t be closed. These accounts will continue to operate as normal accounts.”

As per the eligibility criteria, the person should not have been a taxpayer at the time of opening the account now, but what if the person earns higher in the future and falls in the taxable category, will the APY account continue to become invalid?

D'souza clarifies, “If APY account holder is not a taxpayer at the time of opening account and subsequently becomes income tax payer then APY account will remain active, it won’t be closed or discontinued.”

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So, if your account open date is before October 1, 2022, the account can run the same way, and the pension amount opted is guaranteed to the subscriber. However, if the account was opened on or after this date, upon meeting all the given conditions, the account will continue running even if the subscriber’s taxpayer status changes.

To eliminate any doubts, APY subscriber can check their APY account status on the central record-keeping agencies portal or apps or get it from their APY Service Provider.