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.

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.

Written By: PolicyBazaar - Updated: 19 January 2021
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