PFRDA discontinues auto-debit for APY subscribers until 30 June 2020

The Pension Fund Regulatory and Development Authority (PFRDA) has reportedly issued a circular stating that the auto-debit facility from savings account of the Atal Pension Yojana (APY) has been stopped until 30 June 2020. The facility allowed investors to contribute to the scheme regularly.

With the auto-debit facility now discontinued, the subscribers’ savings account will not be debited for contributions to the Atal Pension Yojana scheme.

The PFRDA circular informed that since all sections of the society had been adversely affected by the outbreak of the coronavirus pandemic, it has become especially difficult for the economically weaker sections to continue their contributions to the APY scheme.

APY subscribers have the option to contribute either on a monthly or quarterly basis. Now with the auto-debit facility being discontinued until June 30, subscribers in financial turmoil can sigh a sign a relief for a while.

PFRDA added that the APY subscribers who have regularised their accounts by contributing non-deducted APY contributions along with the respective APY contributions between July 1 and September 30 would not attract any penal interest.

However, subscribers are required to make the contributions that were not made until June 30 between 1 July 2020 and 30 September 2020 with the regular APY contributions for those months.

Also Read: Income Tax Not Applicable on Disability Pension for Defense Personnel

PFRDA also informed that delayed payments towards APY during the period would attract a penalty. A penalty of Re.1 is charged on delayed payment of every Rs.100 as a contribution to the APY scheme every month.

A subscriber’s APY account can be regularised once the overdue amount which shall include the penalty is paid. The pension under the scheme is guaranteed only after the subscriber’s APY account has been regularised.

Thanks to latest PFRDA circular, no such penalty will be applicable on contributions that are unpaid until 30 June 2020.

For any clarifications/feedback on the topic, please contact the writer at viswanathan.v@cleartax.in

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