Ultimate Guide 2022- What is Atal Pension Yojana

The Atal Pension Yojana is the pension plan that is backed by the Indian government for the employees of the unorganized sector. The Atal Pension Yojana scheme is regulated by the PFRDA.
The APY scheme permits the subscribers to receive the guaranteed monthly pension between Rs 1000 and Rs 5000 after retirement. The Atal Pension Yojana scheme is available at all the branches of Indian Post, which facilitates the basic banking approaches.

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Know the Eligibility for Atal Pension Yojana

Any Indian citizen who is between the age of 18 years and 40 years can apply for the APY scheme.

The Aadhar card is the primary KYC. The mobile number and Aadhar card are highly recommended to be obtained from the subscriber for a smooth operation of the APY scheme. In case, the details of the Aadhar card are not available during registration, they can be submitted later.

To simply put, under the Atal Pension Yojana scheme, the subscribers receive the guaranteed monthly pension. The benefit of a minimum pension is guaranteed by the government of India. One of the key Atal Pension Yojna benefits is that even the employees of the private sector can subscribe to the scheme. The subscribers simply need to choose the contribution amount as it will affect the returns.

Understanding Atal Pension Yojana Contribution

The Indian government co-contributes 50% of the subscribers' contribution or even Rs 1000, whatever is low. The co-contribution of the government is accessible for those uncovered by any of the Statutory Social Security Schemes and has not been paying the income tax.

The Indian government will co-contribute to every entitled subscriber, for 05-years who joins the APY scheme between 2015, June 01 to 2015, December 31. The benefit of 05-years of the government co-contribution within the Atal Pension Yojana should not exceed 05-years for the subscriber that includes the Swavalamban beneficiaries’ migration. Moreover, all the bank account holders can also join the Atal Pension Yojana scheme.

The table below shows the indicative monthly contribution:

Entry Age 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 84 126 168 210
20 50 100 150 198 248
25 76 151 226 301 376
30 116 231 347 462 577
35 181 362 543 722 902
40 291 582 873 1164 1454

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Understanding Charges for Default

The banks are required to collect an additional amount for the payments that are delayed. Such amount will differ from Rs 1 to Rs 10 each month as listed below:

  • Rs 1 each month for the contribution up to Rs 100 each month.

  • Rs 2 each month for the contribution up to Rs 101 to Rs 500 each month.

  • Rs 5 each month for the contribution up to Rs 501 to Rs 1000 each month.

  • Rs 10 each month for the contribution that is beyond Rs 1001 each month.

The fixed sum of penalty or the interest will remain as part of the subscriber pension corpus.

How to Apply for the Atal Pension Yojana?

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

  • All the nationalized banks provide the APY scheme. Visit the nearby branch to start the Atal Pension Yojana account. One can apply online as well.

  • The Atal Pension Yojana forms are available in Hindi, English, Marathi, Bangla, Odia, Kannada, Gujarati, Telugu and Tamil languages.

  • Fill the account opening form of the Atal Pension Yojana and submit it to the bank.

  • Provide the valid contact number and submit a copy of the Aadhar card.

  • Once the Atal Pension scheme application is approved, a message will be shared shortly.

Important Information for the APY Scheme Subscriber

The discontinuation of payment of the contribution amount will lead to the following:

  • The account will be frozen after 06 months.

  • The account will be deactivated after 12 months.

  • The account will be closed after 24 months.

The Atal Pension scheme subscriber should ensure that the bank account should have sufficient fund for the auto-debit of the APY contribution amount.

Exit from the Atal Pension Yojana Scheme

The exit from the Atal Pension scheme is allowed at 60 years of age with 100 per cent annuitization of the pension wealth. Upon exit, the pension will be available to the subscriber.

In case of the death of the subscriber the pension will be accessible to the spouse; however, on the death of both the subscriber and spouse the pension wealth corpus will be returned to the nominee.

The exit before 60 years of age is not allowed; however, it is allowed under exceptional circumstances such as the death of the beneficiary or any terminal disease.

Wrapping it Up

The Atal Pension Yojana scheme is a landmark move by the Indian government towards the pensioned society from the pension less society. The prime objective of the APY scheme is to ensure that no citizen of India has to worry about any ailments, disease in old age or accidents and gives them a sense of security.

The Atal Pension Yojana scheme has simple and easy to understand terms and conditions that makes it convenient for the contributors to open the Atal Pension Yojana account.

What else are you waiting for?

Go and open the APY account today!

*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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