Here is Everything you Want to know About Atal Pension Yojana

As the government of India was concerned with regards to the income security for the old age and focused upon encouraging and helping to save for retirement.

Addressing the longevity risks amongst the unorganized sector workers and encouraging the same to save for the retirement voluntarily. The government of India introduced a new scheme known as the ‘Atal Pension Yojana’. The Atal Pension Yojana was launched on 09th June 2015 and is duly administered by Pension Fund Regulatory and Development Authority.

What is Atal Pension Yojana?

Atal Pension Yojana is the pension scheme that focuses mainly at the unorganized sector like the delivery boys, maids, gardeners and so forth. The Atal Pension Yojana replaced the earlier Swavalamban Yojana. 

The key objective of the Atal Pension Yojana is to ensure that no citizen of India worries about any accident, illness, ailments in old age, and so forth and assures a sense of security. Any private-sector employees or the employees working with any such organization, which do not provide pension benefit might also apply for the scheme.

Besides, there is an alternative of getting the fixed pension of a sum of Rs 1000, Rs 2000, Rs 4000, Rs 3,000 or Rs 5,000 after attaining 60 years of age. The pension is determined on the premise of the age of an individual and the sum of contribution. The spouse of the contributor can easily claim the pension on the demise of the contributor and in case of demise of both the spouse and the contributor the nominee will receive the accumulated corpus. In case the contributor passes away before 60 years then the spouse is given an alternative to either continue the scheme for a balanced period or claim the corpus and exit the scheme.

We know that the scheme will be managed by the PFRDA, and the government also make the co-contribution of 50 per cent of the complete contribution or simply Rs 1,000 each annum whatever is lower to the subscribers who joined the Atal Pension Yojana scheme between June- December 2015, for a term of 5-years. The subscribers should not be part of any statutory social security schemes, for instance, employees provident fund and also not be paying income taxes to avail the co-contribution of the government.

Eligibility Criteria For Atal Pension Yojana

To avail the advantages of the Atal Pension Yojana, the following key requirements need to be fulfilled:

  • Applicant should be an Indian citizen and must fall under the age bracket of 18 years to 40 years.
  • The contributions made should be for a minimum of twenty years.
  • The bank account needs to be linked with the Aadhar Card.
  • The mobile number should be valid.

Anyone availing the advantage of Swavalamban Yojana will be registered automatically to the Atal Pension Yojana.

What are the Advantages of Atal Pension Yojana?

Let us take a brief understanding of the benefits of Atal Pension Yojana listed below:

  • Financial Security: Some schemes offer the benefits of pension to those individuals who fall into the unorganized sector. The Atal Pension Yojana is helpful for them and ensures financial safety for the golden phase of life. The pension range right from Rs 1000 to Rs 5000 and can be high when the returns from the contributions are high.
  • Convenient: As the pension contributions are auto-debited from the account the subscribers need not fill out the slips or stand in queues, etc. It also instils discipline as the sum is deducted automatically.
  • Safe: As the pension is guaranteed and backed by the government of India, it is one of the safest investment with negligible risks. The investments are mostly made in secured avenues like the term deposits with the banks, government securities, etc.
  • Tax Benefits: Avail the benefit within Section 80CCD for the contributions made to the Atal Pension Yojana.

Note: The tax benefits are subject to change in the prevailing laws in India.

How to Apply For the Atal Pension Yojana?

To avail the benefits of the Atal Pension Yojana, follow the steps mentioned below:

  • To begin with, all the nationalized banks offer this scheme. Anyone interested can visit any nationalized bank and begin with the Atal Pension Yojana.
  • The forms of Atal Pension Yojana is available at the banks and online as well. From the official website of the form can be easily downloaded.
  • The Atal Pension Yojana forms will be available in Hindi, English, Marathi, Bangla, Kannada, Odia, Gujarati, Telugu and Tamil.
  • Fill the Atal Pension Yojana form and submit it to the bank.
  • In case the bank doesn’t have the valid contact number, make sure that the number is valid.
  • Submit the photocopy of the Aadhar card.

Whenever the application is approved, a confirmation message will be sent.

Understanding the Monthly Contributions

The monthly contributions are on the premise of the sum of pension that one wishes to receive upon the retirement and also at the age when one initiates contributing. The table below shows the contribution that needs to be done per annum on the premise of the age and the pension plan:

Entry Age

Contribution Years

Monthly Pension of Rs 5000 Indicative Return of the Corpus of Rs 8.5 lakh

Monthly Pension of Rs 5000 Indicative Return of the Corpus of Rs 6.8 lakh

Monthly Pension of Rs 5000 Indicative Return of the Corpus of Rs 5.1 lakh

Monthly Pension of Rs 5000 Indicative Return of the Corpus of Rs 3.4 lakh

Monthly Pension of Rs 5000 Indicative Return of the Corpus of Rs 1.7 lakh

18 years

42

210

168

126

84

42

19 years

41

228

183

138

92

46

20 years

40

248

198

150

100

50

21 years

39

269

215

162

108

54

22 years

38

292

234

177

117

59

23 years

37

318

254

192

127

64

24 years

36

346

277

208

139

70

25 years

35

376

301

226

151

76

26 years

34

409

327

246

164

82

27 years

33

446

356

268

178

90

28 years

32

485

388

292

194

97

29 years

31

529

423

318

212

106

30 years

30

577

462

347

231

116

31 years

29

630

504

379

252

126

32 years

28

689

551

414

276

138

33 years

27

752

602

453

302

151

34 years

26

824

659

495

330

165

35 years

25

902

722

543

362

181

36 years

24

990

792

594

396

198

37 years

23

1087

870

654

436

218

38 years

22

1196

957

720

480

240

39 years

21

1318

1054

792

528

264

40 years

20

1454

1164

873

582

291

Important Information that You Should Know About Atal Pension Yojana

Take a look at the following important information in regards to the Atal Pension Yojana:

  • As the contributions will be periodic, make sure that the account has sufficient balance as the sum will be deducted automatically.
  • The premium can be increased at the will of the subscriber by simply visiting the bank and speaking to the manager for the required changes.
  • A penalty is levied in case of default on the payments. A penalty of Rs 1 each month for the contribution of each Rs 100 or the part thereof.
  • The account will be frozen in case of default on the payments for six months and if the same is continued for twelve months then the account will be closed and the remaining sum will be paid to the subscriber.
  • Early withdrawal is not permitted, however in case of demise or terminal ailment, the nominee or subscriber will receive the complete sum back.
  • In case the scheme is closed before 60 years of age for any reason the contribution in addition to the earned interest will be returned. One will not be entitled to receive the co-contribution of the government and the earned interest on that sum.

Wrapping it Up

Gone are the days when only the middle class could enjoy the benefits of pension plans and create a safe retirement nest. The Atal Pension Yojana is an effort to provide financial protection to the working class of the unorganized sector. This scheme also enables to save the corpus for the old-age.

Written By: PolicyBazaar - Updated: 16 February 2021
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