Atal Pension Yojana – A complete guide

Updated on 23 Jan 2020.

Indian government launched Atal Pension Yojan (APY) in 2015. APY is a low-cost pension scheme for the people employed in the unorganized sector and small sectors. The pension would be between Rs.1,000 per month to a maximum of Rs.5,000 per month.

It’s a government’s measure to provide financial security by providing a defined pension.

Atal Pension Yojana Eligibility

Any citizen of India can join the APY scheme if satisfy following criteria-

  • The minimum age of joining – 18 years
  • The maximum age of joining – 40 years. This means the minimum contribution towards this scheme is 20 years.
  • A savings bank account, Aadhar Card and mobile number.
  • The subscriber shouldn’t be covered under any social security scheme
  • The subscriber should not be an income taxpayer.

Aadhar Card is not mandatory but appreciated for KYC details.

Atal Pension Yojana Features and Benefits

Let’s have a look at all the details including eligibility and benefits of Atal Pension Yojna.

1. Pension Amount

Under APY scheme contributors will get a guaranteed pension of Rs. 1,000, 2,000, 3,000, 4,000 and Rs. 5,000 depending upon the contributions made. The pension will start at the age of 60 years.

One can open only one APY account. Multiple accounts are not permitted.

2. Contribution/Subscription Amount

You can fix the contribution amount based on the pension amount you want at a later stage.

For instance, if the subscriber joins at the age of 18 years, and he expects a monthly pension of Rs.1,000 per month.  He has to contribute Rs.42 per month till he attains the age of 60 years. Similarly, if he wishes to have a monthly pension of Rs.5,000 then contribution per month will rise to Rs.210.

You can understand monthly contribution at different age and expected pension amount from the table below.

Atal Pension Yojana Contribution Calculator

It’s better to start as early as possible to get maximum benefits.

3. Contribution Payment Mode

The subscriber can contribute on a monthly, quarterly or half-yearly basis. The contribution amount will auto-debited from his savings account provided to the department. This auto-debit facility is the only payment method.

You can fix a particular date for auto-debit of contribution otherwise the contribution will be fixed as per the date of the first contribution made.

4. Change in the Contribution Payment

You can change the contribution payment amount once a year. You can do that in April every year. You can increase or decrease the contribution amount to switch towards a higher or lower pension amount.

5. Government Contribution

The government will add 50% of the total contribution with a maximum amount of Rs. 1,000 at the end of the financial year.

Further, if you are among the following social security schemes or you an income taxpayer, you are not eligible for the benefit of Government Contribution.

  • Employees Provident Fund & Miscellaneous Provision Act, 1952.
  • The Coal Mines Provident Fund and Miscellaneous Provision Act, 1948.
  • Assam Tea Plantation Provident Fund and Miscellaneous Provision, 1955.
  • Seamen’s Provident Fund Act, 1966.
  • Jammu Kashmir Employees Provident Fund & Miscellaneous Provision Act, 1961.
  • Any other statutory social security scheme

If you are covered under any of the above schemes such as EPF, you can still apply for Atal Pension Yojana but the benefit of Government Contribution would not be available to you. But you will get the rest of the benefits provided under the APY scheme.

5. Default in Payment of Contribution

Insufficient balance in the savings bank account to pay the contribution towards the APY account may cause penalty ranging from Rs.1 per month to Rs.10 per month.

  • 1 per month for contribution to upto Rs.100 per month.
  • 2 per month for contribution up to Rs.101 to 500 per month.
  • 5 per month for contribution between Rs.501 to Rs.1000 per month.
  • 10 per month for contribution beyond Rs.1001 per month.

Continuous non-payment of the contribution may result in the following actions:

  • After 6 months account will be frozen.
  • After 12 months account will be deactivated.
  • After 24 months account will be closed.

6. Nomination facility

The nominee name is to be filled in the form along with his/her aadhar card. In case the nominee is minor, you can provide the name of the legal guardian also along with the minor’s details.

Benefits of Atal Pension Yojana

  • Anyone who belongs to an unorganized social sector can secure his old age with a guaranteed pension.
  • The pension will last life long.
  • In case of death of subscriber, his/her spouse will get the same amount of monthly pension.
  • In case subscriber & spouse, nominee will get the pension wealth accumulated till date.
  • Automatically save money for his future without wasting his time in the bank queues.
  • The process is simple so even uneducated can get the benefits. He has to approach the nearest post office or bank.
  • Another plus point is – The government will also contribute to the subscriber’s account.
  • Flexibility to pay monthly, quarterly or half-yearly.
  • Flexibility to change the contribution amount depending upon current income.
  • In case of payment skip, you can still continue by paying small penalty charges.

How to Apply for Atal Pension Yojana?

You can approach your nearest post office or bank where you have savings account to open Atal Pension Yojana Account. You have to fill a simple consent-cum-declaration form and submit there.

You can download application form using below link.

https://www.pfrda.org.in/myauth/admin/showimg.cshtml?ID=1269

The application form will look like this-

Atal Pension Yojana

Withdrawal Procedure in Atal Pension Yojana

1. At the age of 60 years: Upon completion of 60 years, the subscribers can submit the request to the associated bank/post office for drawing the guaranteed monthly pension.

2. In case of death of the Subscriber (after 60 years): In case of death of the subscriber, pension benefits would be transferred to the spouse and on the death of both of them (subscriber and spouse), the pension corpus would be given to his nominee.

Atal Pension Yojana Nominee Corpus

3. Exit Before the age of 60 Years: The Exit before age 60 would be permitted only in exceptional circumstances, i.e., in the event of the death of beneficiary or terminal disease.

4. Death of Subscriber before the age of 60 years: If subscriber demises before attaining the age of 60 years (contributing age limit), then only the deposited amount will be refunded to the nominee. The refundable amount will not include any interest.

Tax Benefits of Atal Pension Yojana

There are no tax benefits available for Atal Pension Yojana because the prime focus of this scheme is to facilitate small unorganized sector who doesn’t come under Income Tax payer category.

That’s all about Atal Pension Yojana. Let me know your thoughts in the comments.

 

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