Tax Payers Can No Longer Be a Part of the Atal Pension Yojana: Fin Min

Income tax payers will soon be disallowed to be a part of the Atal Pension Yojana (APY). According to a gazette notification issued by the Ministry of Finance, "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 1 October 2022.
 
The notification has also clarified that an 'income tax-payer' is a person who is "liable to pay income-tax in accordance with the Income Tax Act, 1961, as amended from time to time."
 
The notification further said that those who are already participating in the scheme will cease to be a part of it from 1st October. However, they will receive the money accumulated in their respective accounts.
 
“In case a subscriber, who joined on or after 1 October, 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 said.
 
The scheme was announced by the government in Budget 2015. Under the scheme, a minimum monthly pension ranging between Rs1,000 and Rs5,000 per month is given to the subscribers. They must join and contribute to the scheme between the age of 18 and 40.
 
The APS brochure states the reason for starting the scheme as, "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."
 
Also, it is administered by the Pension Fund Regulatory and Development Authority (PFRDA) in India. As of 4th June, National Pension Scheme (NPS) and APY have over 53 million subscribers, combined. Also, the Assets Under Management (AUM) under the two schemes was above Rs 7 trillion.

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Changes in Our Business Model
 
 
25th Sept 2020
 
Greetings from Moneylife Advisory Services
 
Between financial years 2019-21, SEBI has come up with extensive changes to investor advisor regulations. On Sep 23, 2020, SEBI had issued new additional guidelines. This comes just two months after extensive changes announced in July 2020. Earlier, in December 2019 there was an ad hoc circular
 
As a result of these changes, IAs, cannot accept fees through credit cards, will have to sign a 26-clause investor agreement, have to maintain physical record written & signed by client, telephone recording, emails, SMS messages and any other legally verifiable record for five years. IAs were already asked to record the suitability and rationale for every piece of advice given, sign them and store them for five years.
 
While these extensive and frequent changes, designed to strengthen the conduct of IAs are well-meaning, these have sharply increased compliance efforts and cost. We, being online advisors, find many of changes harder to implement, compared to advisors working in the physical space. We will have to have an army of advisors, administrative and tech staff to be compliant. If we do this, we will have to divert money to these areas and the cost of our service will double. We want to remain the least-cost service in the market to benefit more and more people. In the circumstances, we are forced to change our business model from “advisory” to “research”. This will mean the following:
 
What remains the same:
  • Recommendations on insurance, investment and Lion stocks, will continue as a part of the MAS premium subscription. Our strength has always been research and this will remain available to you through our recommendations.
  • The magazine and all textual content will remain as part of the service
  • We will have to suspend the restructuring tool.
 
What changes:
  • The interactions in Ask / Handholding will offer investment advice but not specific to your situation. It will offer information on investment products and also clarify your doubts about various financial products. It will be a forum for information, not for advice. This will be implemented with immediate effect and our guidelines in Ask, reflect this now.
 
Over the next few weeks our site and our communication to you will reflect these and other additional changes.
 
We feel this will not affect you much in terms of what really matters in investing: knowing what to buy and when to buy. This is our edge and it will still be available to you.
 
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Debashis Basu
Founder