What is Atal Pension Yojana?

Atal Pension Yojana (APY) was launched by the Government of India in 2015 to provide social security to citizens of India above the age of 60 years. The scheme is regulated by the Pension Fund Regulatory Authority of India (PFRDA).

It is an extension of the Whole National Pension Scheme. Earlier there was a pension scheme called ‘Swavalamban Pension Yojana’ but it was hardly accepted by the general public and this Atal Pension Yojana replaced it.

Objective of Atal Pension Yojana

The primary objective of Atal Pension Yojana is to provide security to any Indian citizen not to worry about sudden illness, accident or chronic disease in their old age.

The scheme creates a compulsory savings habit among workers mainly in the unorganized sector such as agricultural workers, workers in contract or small scale industries or people working in the private sector, who are not tax payers or are not part of any other social security scheme, which leads to pension after retirement. Same will pay guaranteed every month.

Atal Pension Yojana Details

This scheme provides pension security to citizens of India with minimum investment. Even after the death of the depositor his spouse can claim this pension. The amount of this pension will depend on the deposit of the depositor.

Now, let’s take a look at the specifics of this plan-

• By investing in this pension scheme, you can get a fixed pension starting from Rs 1,000 to a maximum of Rs 5,000 per month.
• The contributor will start getting pension at the age of 60.
• The age limit for investing in Atal Pension Yojana is between 18 and 40 years.
• You have to invest for a minimum of 20 years.

Read details below to know other features of this plan-

Decreasing/increasing deposit amount:

In Atal Pension Yojana you are eligible for pension after the age of 60 years. The amount you get as pension depends on your contributions. But the government has given you this facility that you can reduce or increase the deposit amount once a year as per your requirement.

Determining the time of deposit:

In this plan you can decide how you want to deposit the money. You can deposit every month, every 3 months or every 6 months.

Automatic Debit:

One of the primary benefits of Atal Pension Yojana is the automatic debit facility The monthly contribution will be direct debited if the depositor’s bank account is linked with his pension account. However, for this facility the depositor should have sufficient funds in his account otherwise penalty will be levied.

Terms of Penalty:

If the beneficiary delays the payment of the contribution, the following penalties will be levied.

If the beneficiary does not pay continuously for 6 months then the account will be defaulted and if there is default for 12 consecutive months then the account will be deactivated and the deposited amount along with interest will be returned to the beneficiary.

Tax Exemption:

Contributions to Atal Pension Scheme are tax deductible under Section 80CCD of the Income Tax Act, 1961. Also, the maximum deduction under section 80CCD (1) is 10% of the total income of the individual up to a limit of ₹1,50,000 and in addition an additional deduction of ₹50,000 is available under section 80CCD (1B). Besides, the maturity amount of Atal Pension Yojana is also exempted from tax.

Withdrawal Policy:

Beneficiary in Atal Pension Yojana will be eligible to receive monthly pension after crossing the age of 60 years. If the subscriber dies due to any reason, the pension amount will be paid to the spouse of the subscriber. However, he can withdraw the pension scheme with the total contribution amount and accrued interest instead of the pension amount.

If both the spouses die, the nominee will be given a pension fund of minimum ₹1,70,000 to maximum ₹8,50,000 in such circumstances.

Withdrawals before the age of 60 are generally not allowed in this scheme. However, the subscriber can opt out of this pension scheme in case of death or terminal illness of the beneficiary i.e. any death bed disease. In that case, only the beneficiary will get the contribution and interest earned and he will be deprived of any government contribution.

Atal Pension Scheme Eligibility

To invest in Atal Pension Yojana scheme and get pension you need to fulfill the following requirements –

• Beneficiary must be an Indian citizen.
• Age limit should be between 18 to 40 years.
• Contribution to the scheme should be made for a minimum of 20 years.
• The depositor must have a valid savings account linked to Aadhaar.
• Must have an active mobile number.
• The depositor should not be liable to pay income tax.
• The depositor cannot be a beneficiary of any other social welfare scheme.

Atal Pension Yojana List

The amount of investment in Atal Pension Yojana according to the age and pension value of the depositor is mentioned in the table below:-

What are the benefits of Atal Pension Yojana?

APY gives you the following benefits-

Pension Security:

Unorganized sector workers can enjoy pension benefits after the age of 60 through this scheme. Under this scheme a minimum pension of ₹1000 to a maximum of ₹5000 is available and helps meet basic needs like medicine in old age.

Nominee Benefits:

In case of death of a beneficiary in Atal Pension Yojana his spouse is entitled to receive pension benefits. In that case they can either close their account taking the entire corpus at once or opt for the same pension amount as the original beneficiary. In this scheme the beneficiary can nominate one person and in case of death of both the spouses that nominee will be entitled to get the entire corpus amount. In that case he can get a maximum corpus of ₹8.5 lakh.

Government Supported Projects:

Atal Pension Yojana is regulated by Pension Fund Regulatory Authority of India (PFRDA), Government of India. So, there is no possibility of loss if the government guarantees their pension.

Benefits of tax exemption:

Contributors to Atal Pension Yojana can avail tax deduction up to ₹1.5 lakh under section 80CCD (1) and up to ₹50,000 under section 80CCD (1B). Besides, the maturity amount of Atal Pension Yojana is also exempted from tax.

How to apply for Atal Pension Yojana

You can open Atal Pension Yojana pension account in any bank in India. Follow the steps below to apply for Atal Pension Yojana:

• Visit the nearest branch of the bank where you have an account.
• There take an application form for Atal Pension Yojana and fill it properly with necessary details.
• Now customer has to submit a valid mobile number and photocopy of Aadhaar card along with the filled form.
• Atal Pension Yojana has mandated mobile number to keep the service transparent where you can get regular updates about contribution credit, account balance and any other account related activities through SMS alerts.

Also, you can easily change any specific details like phone number, name or address of the nominee, if you need to change the information later.

Atal Pension Yojana Form

• APY application form can be downloaded from National Securities Depository Limited or pfrda.org.in website or any bank official website.
• After downloading the form take a print of it and fill it properly.
• Along with the filled form, a photocopy of Aadhaar card needs to be submitted to the bank and a valid mobile number of the customer is also required.
• At the bottom of the Atal Pension Scheme form there is an acknowledgment section called “Registration of Atal Pension Scheme (APY)” which the applicant need not fill. It will be filled by the concerned bank and once your application is processed the bank will return the acknowledgment receipt to you.
• After approval of Atal Pension Yojana facility application form, you will get a confirmation message on that mobile.

Atal Pension Yojana closed

• After you reach the age of 60, you can opt out of the scheme with the full annuity of your pension. But for that you must go to the bank and apply for your pension
• However, in case of emergency such as terminal illness or death, the plan can be withdrawn even before the age of 60 years. In that case the applicant’s spouse will be entitled to pension. He can then remain in the pension scheme or withdraw the scheme with the accumulated amount and interest.
• If the applicant dies after the age of 60 years and then his spouse applies for termination of the scheme, then he will get the entire corpus amount.

Here is a table of corpus amount based on your pension amount: