Contributions made to the Atal Pension Yojana (
As per the circular, the tax benefits for contributions to APY would include the additional deduction of Rs 50,000 under section 80CCD(1) introduced in last year's Budget.
Talking of the scheme, APY is open to Indians aged between 18 and 40 years and the minimum tenure is of 20 years. Ever since it was launched in June last year, it has seen nearly 20 lakh subscriptions.
After its release, APY replaced the NPS Lite or Swavalamban scheme, which had received about 45 lakh subscriptions in six years of its release.
However, not everything is in the favour of investors here. The government will contribute 50% of the contribution made by the investor for a period of five years, the benefit of which will only go to subscribers who put in less than Rs 1,000 a year and those who would join the scheme before March 31, 2016.
It also means that investors with taxable income are also not eligible for the benefits.
Amongst the 20 lakh subscribers, small-ticket investors contribute a major part. The AUM of Rs 328 crore is spread across 19.77 lakh accounts, which makes the average balance per account to be only Rs 1,640. In comparison to this, NPS Lite, the scheme that it had replaced which benefited from the market rally since 2010 has about Rs 1,982 crore spread across 44.63 lakh accounts, making the average to be 4,440 per account.
Image source
