News That Matters

Auto-debit of Atal Pension Yojana contributions will re-start from July 1

From July 1, 2020, banks will restart auto-debiting monthly contributions from the accounts of Atal Pension Yojana (APY) subscribers. “As you are aware, vide its circular (Ref. No: PFRDA/2020/8/P&D-APY/1) dated April 11, 2020, Pension Fund Regulatory and Development Authority (PFRDA) had instructed Banks to stop auto-debit of APY contribution till 30th June, 2020. Accordingly, auto debit for APY contributions shall resume from 1st July, 2020,” PFRDA stated in an email communication to subscribers of the scheme.

Back in April, the PFRDA had announced that auto-debits from APY subscribers’ bank accounts would be halted till June 30, 2020. The decision, PFRDA said, was taken as majority of the pension scheme subscribers belonged to the lower strata of society and were suffering the most during the coronavirus-induced lockdown.

The latest PFRDA communication also stated that penal interest will not be charged if the subscriber’s pension scheme account is regularised before September 30, 2020. “Penal interest will not be charged if your non-deducted APY Contributions from April-2020 to August-2020 are regularised along with regular APY contributions before 30th September, 2020.”

Usually a penalty is collected by banks for delayed contributions. According to the official APY website, these are the penal charges for delayed contributions:

  • Re 1 per month for contribution up to Rs 100 per month;
  • Rs 2 per month for contribution between Rs 101 and Rs 500;
  • Rs 5 per month for contribution between Rs 501 and Rs 1,000;
  • Rs 10 per month for contribution exceeding Rs 1,001.

What is Atal Pension Yojana?
Atal Pension Yojana is a scheme launched by the Government of India to provide pension benefits to citizens working in the unorganised sector. Any Indian citizen aged between 18 years and 40 years can invest in the scheme. A bank account is mandatory to make contributions to the scheme.

Under the pension scheme, a citizen is guaranteed minimum monthly pension ranging between Rs 1,000 and Rs 5,000. The subscriber’s monthly contribution to the scheme depends on the age they start making the contributions and the amount of pension they want at the age of 60 years.

Click here to download ET Onlineā€™s guide to everything personal finance in the times of Covid-19

Let’s block ads! (Why?)

Personal Finance News-Wealth-Economic Times

Leave a Reply

Your email address will not be published. Required fields are marked *