Contributions to government's flagship social security scheme -- Atal Pension Yojana (APY) -- will be eligible for tax benefits.
The Central Board of Direct Taxes (CBDT) has issued a notification in this regard.
The APY has been notified as a pension scheme under Section 80CCD of Income-tax Act, which deals with deduction in respect of contribution to central government's pension schemes.
Under the APY scheme, the subscriber would receive a fixed pension in the range Rs 1,000-Rs 5,000 per month after attaining the age of 60 years, depending on contribution which would vary at the age of joining.
Any citizen of India can join APY scheme.
In APY, government co-contribute 50 per cent of the total contribution or Rs 1,000 per annum, whichever is lower, to the eligible APY account holders who joined the scheme during the period June, 2015 to December, 2015. The co-contribution will be given for 5 years from 2015-16 to 2019-20.
The limit on deduction on account of contribution to a pension fund and the National Pension System has been increased from Rs 1 lakh to Rs 1.5 lakh.
