Know The Benefits offered By  Atal Pension Yojana

For workers working in the unorganized sector financial planning may seem far-fetched. However, to secure the financial future of the workers working in unorganized sectors like drivers, maids, gardeners, etc. the Atal Pension Yojana was launched by the government in June 2015.

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The Atal Pension Yojana was specifically launched with an objective to help workers to save money for their retirement days and guarantees return post-retirement. This social security scheme was launched in replacement to the previous government scheme Swavalamban Yojana. To ensure the financial security of the individuals, the scheme also guarantees a 50% co-contribution by the Central Government of the total prescribed contribution by the workers i.e. up to Rs. 1000 per annum. However, this contribution is only available for those who joined Atal Pension Yojana before 31.12.2015. let’s read further to know more about Atal Pension Yojana Scheme.

Atal Pension Yojana Benefits

The Atal Pension Yojana is structured in a very simple way. As one of the safest pension plans, APY  is very easy to understand for anyone who wants to open the account under the scheme. The Atal Pension Yojana savings scheme benefits can also be availed by the employees of the private sector. As per one’s requirement, the subscriber can choose the contribution amount. The following are different Atal Pension Yojana Benefits to know about.

  • Death Benefits

    The Atal Pension Yojana death benefits can be availed by the spouse of the contributor. In case of death of the subscriber, the pension is automatically given to the spouse who is the default nominee. In case of demise of the subscriber and the spouse, the nominee will receive a predefined accumulated amount for the particular pension slab. In case of the subscriber’s demise before the age of 60 years, the spouse has the option to either close the account and receive the accumulated fund or continue the APY account and receive the pension after 60 years.

  • Retirement Benefits

     Retirement benefits are the main objective of the Atal Pension Yojana scheme. Based on the contribution made by the subscribers, they are entitled to receive the guaranteed pension amount of Rs. 1000/ Rs.2000/ Rs.3000/ Rs. 4000 or Rs. 5000 on attaining the age of 60 years. The contribution amounts for these pensions are different. The subscriber will be In the event of the unfortunate demise of the subscriber, the pension amount will be paid to the spouse or nominee of the scheme.

  • Tax Benefit

     Along with the Atal Pension Yojana benefit of guaranteed return, the scheme also offers tax benefits under Section 80CCD of the Income Tax Act.

    The entire accumulated fund is managed and distributed by the Pension Funds Regulatory and Development Authority of India. As a government-backed savings scheme, it is one of the safest investment options available in the market that helps the individual to financially secure their life after retirement.

The Eligibility Criteria for Atal Pension Yojana

  • The subscriber must have a savings bank account linked with Adhaar Card Number and registered mobile number.

  • The individual should age between 18 years to 40 years.

  • The minimum contribution limit is of 20 years.

Monthly Contribution and Mode of Payment

The Atal Pension Yojana is a government-initiated pension scheme wherein the subscribers need to make a periodic contribution towards the scheme. The accumulated fund is paid back to the subscriber in form of a fixed monthly income of Rs. 1000/ Rs.2000/ Rs.3000/ Rs. 4000 or Rs. 5000 on attaining the age of 60 years. The monthly contribution depends on the amount of monthly pension you would like to get after retirement. Thus, even if an individual joins the scheme at the age of 40 years he/she will need to contribute towards the scheme for the tenure of 20 years to receive the annuity.

Age of Entry Years of Contribution Monthly Pension of Rs.1000 Monthly Pension of Rs.2000 Monthly Pension of Rs.3000 Monthly Pension of Rs.4000 Monthly Pension of Rs.5000
18

 

42 42 84 126 168 210
19 41 46 92 138 183 228
20 40 50 100 150 198 248
21 39 54 108 162 215 269
22 38 59 117 177 234 292
23 37 64 127 192 254 318
24 36 70 139 208 277 346
25 35 76 151 226 301 376
26 34 82 164 246 327 409
27 33 90 178 268 356 446
28 32 97 194 292 388 485
29 31 106 212 318 423 529
30 30 116 231 347 462 577
31 29 126 252 379 504 630
32 28 138 276 453 551 689
33 27 151 302 414 602 752
34 26 165 330 453 659 824
35 25 181 362 495 722 902
36 24 198 396 543 792 990
37 23 218 436 594 870 1087
38 22 240 480 654 957 1196
39 21 264 528 792 1054 1318
40 20 291 582 873 1164 1454

How to Apply for Atal Pension Yojana Scheme?

To apply for the APY scheme, the individual will need to visit the post office or bank where the savings bank account is held. The individual can also apply for the APY by using internet banking and select the auto-debit facility for the contributions. The premiums will be debited from the age of enrolment to 60 years of age.  

The Procedure of Withdrawal From Atal Pension Yojana Scheme

  • Upon completion of 60 years of Age

    Once the individual reaches the age of 60 years, he/she will need to get in touch with the respective post office or bank and submit the request form for drawing the pension. However, if the subscriber dies after the age of 60 years, the same amount of monthly pension will be paid to the spouse. In case of the demise of both the subscriber and the spouse, the nominee will be entitled to receive the accumulated fund.

  • Exit Before The Age of 60 Years

    As per the circular dated May 2, 2016, on the PFRDA website, exit before age of 60 years is not permitted. However, in specific circumstances like terminal illness or the death of the subscriber, the voluntary exit is allowed. 

The Bottom Point!

As a government backed savings scheme, Atal Pension Yojana benefits the individuals working in unorganized sector and help to secure the financial future after retirement. With simple features and safe investment, this scheme is best for individuals who wants to avail guaranteed return on investment.

*All savings are provided by the insurer as per the IRDAI approved insurance plan.
*Tax benefit is subject to changes in tax laws. Standard T&C Apply
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
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^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.

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