The amount / pension received under the APY is treated as taxable income. The user would be taxed according to the valid income tax plate
In the event of a subscriber’s death 60 years ago, the spouse is the default APY candidate
My father died recently. He was a subscriber of Atal Pension Yojana. It was another 10 years until his retirement at the age of 60. What do we do with this account? Can my mother redeem the entire amount now? If it does, what will be the taxability?
– Madhur Kedia
Raj Khosla, founder and others. Med., MyMoneyMantra
Atal Pension Yojana (APY) manages the Pension Fund Regulatory and Development Office (PFRDA). It is a guaranteed pension system provided by the Indian government. The Government of Indonesia contributes 50% of the amount of the contributor or Rs 1,000 (whichever is lower) per year for five years as a guaranteed benefit under the scheme. After 60 years, the subscriber is entitled to enjoy a guaranteed monthly pension of 1,000 / 2,000 / 3,000 / 4,000 or 5,000 Rs. The pension plan is determined by the government’s age and subscribers’ contributions.
However, in the event of a subscriber’s death 60 years ago, the spouse is the default APY candidate. In this case, your mother has two options – A) continue to contribute to the APY account until the original age, or an additional 10 years and maintain the account in her name, B) Or withdraw the amount from the account. If she decides to continue the pension system, the annuity will be paid for the rest of her life. If it is turned off, the entire accumulated corpus under APY will be returned to your mother.
The amount / pension received under the APY is treated as taxable income. The user would be taxed according to the valid income tax plate.
To proceed with the redemption or resumption of the APY, contact the bank or post office where the account was held and check the status of the account. Make sure that the APY account is active because those accounts on which contributions are stopped / default will be automatically terminated consecutively. Furthermore, know that your mother will need to submit certain documents to apply: the original death certificate of the father, the mother’s KYC, proof of the mother’s bank account details, proof of the mother’s connection to the father. The branch will guide you through the necessary forms and procedures.