Also, the provision related to the discontinuation of payment of contribution has been substantially modified in favour of the subscriber, the finance ministry said in a statement on Thursday.
“The account will not be deactivated and closed till the account balance with self-contributions, minus the government co-contributions, becomes zero due to the deduction of account maintenance charges and fees,” it said.
Besides, the penalty on delayed payment has been simplified to just R1 per month for contribution of Rs 100, or part thereof, for each delayed monthly payment instead of different slabs given earlier.
Similarly, a premature exit from the scheme before 60 years of age was not permitted earlier except in exceptional circumstances, — in the event of the death of the beneficiary or terminal disease. Now the modified provision permits the subscriber to voluntarily exit with the condition that he shall only be refunded the contributions made by him to APY, along with the net actual interest earned on his contributions (after deducting the account maintenance charges).
The other condition enabling voluntary exit is that the government co-contribution, and the interest earned on the government co-contribution, shall not be returned to such subscribers.
The APY was launched by Prime Minister Narendra Modi on May 9.