Atal Pension Yojana (APY) is a pension scheme launched by the Government of India in 2015 for the unorganized sector workers. The scheme aims to provide a guaranteed pension to individuals who are not covered by any other social security scheme.
The objective of the scheme is to provide a social security net to the economically and socially vulnerable sections of the population, particularly the unorganized sector workers, and to encourage them to save for their retirement.
The scheme provides for a guaranteed minimum pension of Rs. 1,000, Rs. 2,000, Rs. 3,000, Rs. 4,000 or Rs. 5,000 per month, depending on the contribution made by the subscriber, starting at the age of 60. The government also co-contributes 50% of the subscriber’s contribution, up to a maximum of Rs. 1,000 per year, for those who join the scheme before 31st December 2019, and who are not covered by any statutory social security scheme and are not income tax payers.
The subscriber can choose to contribute a fixed amount, ranging from Rs. 42 to Rs. 1,454 per month, based on the pension amount they wish to receive. The subscriber’s age, contribution period, and the pension amount chosen, determine the total amount that needs to be contributed over the course of the scheme.
- The scheme is open to all citizens of India between the age of 18 and 40 years who have a bank account and a mobile number.
- The subscriber must not be a member of any other statutory social security scheme.
- The subscriber has to contribute a fixed amount every month to the pension account, based on the age of the subscriber. The contribution can be made by auto-debit from the subscriber’s bank account or through cash or cheque at a bank or post office.
- The minimum contribution is Rs. 55 per month and the maximum contribution is Rs. 200 per month.
- The subscriber can choose the pension amount from Rs. 1000 to Rs.5000.
- On attaining the age of 60, the subscriber will receive a guaranteed pension of Rs.1000, Rs.2000, Rs.3000, Rs.4000 or Rs.5000 per month, depending on the contributions made by the subscriber.
- If the subscriber dies before the age of 60, the spouse of the subscriber will receive the pension until his/her death.
- In case of death of both the subscriber and the spouse, the nominee will receive the pension corpus
APY is eligible for tax benefits under Section 80CCD (1B) of the Income Tax Act, 1961. An individual can claim a deduction of up to Rs. 50,000 per annum from their taxable income for contributions made to the scheme.
It is important to note that the Government of India also provides a co-contribution of 50% of the total contribution or Rs 1000 per annum, whichever is lower, for 5 years for the new subscribers who join the scheme between the 1st June, 2015 and 31st December, 2015 and are not covered by any statutory social security scheme and are not income tax payers.
This scheme is a good option for people who are not covered by any other pension scheme and want to save for their retirement. It is important to note that the scheme requires a long-term commitment and regular contributions to build a pension corpus. It is also important to consider your other financial goals and responsibilities before joining the scheme.
To join the scheme, individuals need to visit their bank branch and fill out an APY registration form, along with providing KYC (Know Your Customer) documents such as proof of identity and address. The forms can also be downloaded from the official website of the Pension Fund Regulatory and Development Authority (PFRDA).
- Who is eligible for Atal Pension Yojana? All Indian citizens between the ages of 18 and 40, who have a savings bank account, are eligible for the scheme.
- How much pension can I receive under the scheme? The pension amount ranges from Rs. 1,000 to Rs. 5,000 per month, depending on the contribution made by the subscriber.
- How do I join the scheme? To join the scheme, individuals need to visit their bank branch and fill out an APY registration form, along with providing KYC documents such as proof of identity and address.
- What are the tax benefits under the scheme? APY is eligible for tax benefits under Section 80CCD (1B) of the Income Tax Act, 1961. An individual can claim a deduction of up to Rs. 50,000 per annum from their taxable income for contributions made to the scheme.
- Where can I download the forms for the scheme? The forms can be downloaded from the official website of the Pension Fund Regulatory and Development Authority (PFRDA).