Atal Pension Yojana

With financial freedom gained from pension plans, life after retirement can be a lot more enjoyable and stress free

Various pension schemes are available, keeping in mind the needs of people who will eventually retire. One such option is the Atal Pension Yojana (APY), which was introduced by the government in 2015. Atal Pension Yojana is a voluntary, contributory pension scheme, managed by the Pension Fund Regulatory and Development Authority (PFRDA) under the National Pension System (NPS) framework.

The primary purpose of Atal Pension Yojana is to ensure income security for people in their old age. This pension scheme is especially targeted at people employed in the unorganized sector. Atal Pension Yojana is also considered a great initiative to help the poor and underprivileged by creating a safety net, something similar to a universal social security system.

What are key features and benefits of Atal Pension Yojana?

One of the key highlights of Atal Pension Yojana is guaranteed minimum monthly pension. This can be Rs 1,000, Rs 2,000, Rs 3,000, Rs 4,000 or Rs 5,000, based on the preference of the subscriber. The individual will receive the selected pension amount starting from age 60 until their death. The pension can be increased if the returns on investment are higher.

The benefits of Atal Pension Yojana are available to the spouse of the subscriber. They will continue to get the pension after the death of the subscriber. In Atal Pension Yojana, the nominee also benefits after the death of the subscriber and their spouse. Nominees receive the accumulated pension amount, the money deposited till age 60. The exact amount varies depending on the contributions made by the subscriber.

What is eligibility for Atal Pension Yojana?

To become eligible for Atal Pension Yojana, the subscriber has to be an Indian citizen. The age should be in the range of 18 to 40 years at the time of subscribing to Atal Pension Yojana.

Contribution amounts under Atal Pension Yojana

Subscriber contributions made under Atal Pension Yojana can vary based on the age and choices of the user. For a younger person joining Atal Pension Yojana, the monthly contributions will be relatively lower. The contribution amount can also vary based on frequency of payments such as monthly, quarterly or half-yearly.

For detailed contribution charts and other information, you can visit – https://pfrda.org.in/hi/schemes/atal-pension-yojana-apy. Various other government sites have contribution charts for Atal Pension Yojana. One of the links currently active is – https://jansuraksha.gov.in/Files/APY/ENGLISH/APY.pdf.

Another benefit of Atal Pension Yojana is that the government also contributes to your pension fund. This amount is 50% of subscriber’s contribution or Rs 1,000 per year, whichever is lower. However, this contribution is currently not available for new joiners.

How to join Atal Pension Yojana?

You can visit any of your preferred bank branch or post office, where Atal Pension Yojana is available. You will have to fill out the form and complete your Aadhaar KYC. Once processed, you will receive a Permanent Retirement Account Number (PRAN). Online enrolment is also available for Atal Pension Yojana via the eNPS portal (enps.nsdl.com). Some bank apps/websites also have an option for joining Atal Pension Yojana.

Exit rules under Atal Pension Yojana

In normal cases, the pension will start at age 60. If the subscriber dies before age 60, their spouse has two options. They can choose to pay the remaining contributions to receive the pension or choose to go with corpus return. Voluntary exit before age 60 is generally restricted. Contributions under Atal Pension Yojana are eligible for deduction under Section 80CCD (up to the overall limits; additional ₹50,000 under 80CCD(1B) may apply for eligible taxpayers). It is important to note that new income-tax payers cannot join the Atal Pension Yojana.