About Atal Pension Yojana (APY): Working sectors are divided broadly into two sectors, i.e., organized sectors and unorganized sectors. Considering the organized sector, the employees have the benefit of the employee pension scheme. EPS is a saving scheme for retirement introduced by the government.
Similarly, Atal pension yojana (APY) is another pension scheme launched in India in 2015-16 for the unorganized sector. It includes employee working in unorganized sectors such as drivers, maids, gardeners, etc. Pension Funds Regulatory Authority of India (PFRDA) is the regulatory authority that supervises the APY.
The primary objective of the Atal Pension Yojana is to provide financial security to the unorganized sectors for their retirement and protection against unfortunate circumstances such as illness, diseases, etc.
Benefits of Atal Pension Yojana
Here are the benefits of Atal Pension Yojana:
Retirement corpus: the individuals get a steady flow of income after they attain the age of 60 years. It helps to meet their basic financial requirements in the old age.
Government-backed up: The scheme is secure and safe as the governmental authority, i.e. PFRDA support it. Therefore, there is no risk of not getting a pension.
Nominee facility: the individual can add a nominee, who shall be entitled to get the pension yojana benefits after the death of the beneficiary. The nominee shall be allowed to receive the entire corpus amount.
Pension amount: Individuals will start getting a pension after the age of 60 years. You have the choice to receive the fixed pension of Rs. 1,000 up to Rs. 5,000.
Features of Atal Pension Yojana
Quick fund transfer: To open the pension account under APY requires saving account in the bank, which provides convenience to debit the funds and transfer to APY account directly. However, ensure to keep funds in the saving account; otherwise, you have to pay the penalty in case of insufficient balance.
Guaranteed pension: The eligible person can choose the amount of monthly pension to be received of Rs. 1,000 up to 5,000 depending upon their monthly contributions.
Tax benefits: Section 80CCD (1) of the Income-tax act, 1961, allows the individual to avail the tax exemption of 10% of the individual’s gross total income (subject to a maximum of Rs. 1,50,000). In addition, they can also take an exemption of Rs. 50,000 under section 80CCD (1B).
Withdrawal of funds: After attaining the age of 60 years, the individual is eligible to receive monthly pensions. In case of terminating the scheme before 60 years, then he shall be entitled to get a refund of cumulative contribution and interest earned only.
However, in case of death or terminal illness, he can terminate the scheme before the age of 60 years, and spouse shall be eligible for pension benefits.
Eligibility to invest in Atal Pension Yojana
- The individual should be an Indian resident
- The age should be in between 18 years to 40 years
- He/she has to contribute for a minimum of 20 years
- He/she shall be the beneficiary of any other social welfare scheme
- Must have a bank account with KYC done
- His/Her bank account must be linked with the Aadhaar and have an active mobile number
Monthly contribution to the Atal Pension Yojana
The monthly contribution depends upon the three factors:
- Final corpus amount
- Monthly pension amount
- Individual age at the time of opening a pension account
|Monthly Contributions for (In Rs.)|
|Entry Age (In Years)||Number of Years of Contribution||Monthly Pension of Rs. 1000 | Expected corpus return – Rs. 1.7 Lakh||Monthly Pension of Rs. 2000 | Expected corpus return – Rs. 3.4 Lakh||Monthly Pension of Rs. 3000 | Expected corpus return – Rs. 5.1 Lakh||Monthly Pension of Rs. 4000 | Expected corpus return – Rs. 6.8 Lakh||Monthly Pension of Rs. 5000 | Expected corpus return – Rs. 8.5 Lakh|
How to apply for Atal Pension Yojana?
If you are eligible, you can visit any of the Indian banks for opening the pension account under the APY. Follow the simple steps and get your account open quickly:
1. Visit the nearest bank in which you have already an account
2. Contact the concerned person and fill out the application form
3. Attach the required documents, active mobile number, and submit it to the bank
Besides that, if you want to open Atal Pension Yojana pension account online, you can download the APY account opening form:
- At the bank’s official website in which you have the saving account, or
- At the official website of Pension Fund Regulatory and Development Authority (PFRDA)
Penalty for delay in contributions to APY
If the individual delays in the contribution made to the APY, then he has to pay the penalty as below:
|Amount of monthly contributions||Penalty amount|
|Monthly contributions up to Rs. 100||Rs. 1|
|Monthly contributions more than Rs. 100 up to Rs. 500||Rs. 2|
|Monthly contributions more than Rs. 500 up to Rs. 1000||Rs. 5|
|Monthly contributions more than Rs. 1000||Rs. 10|
|Continuous payment default for consecutive 6 months||Account shall be frozen|
|Continuous payment default for consecutive 12 months||Account shall be deactivated & invested amount shall be returned to the individual|
|Continuous payment default for consecutive 12 months||Accounts shall be closed|