“Atal Pension Yojana – For a better future after retirement!”
Are you worried about the source of your income after your retirement? In fact, that’s a common thought that strikes everyone’s mind especially from the very moment they start earning.
Preparing for the future is a smart move and above all, a pension plan has always been the first way to do so. After the launch of Atal Pension Yojana by the Indian government, one doesn’t need to worry much now!
What is Atal Pension Yojana(APY)?
A scheme launched particularly to secure a person’s future after retirement, Atal Pension Yojana(APY) aims to provide a certain amount of money to the individual after the age of 60 years i.e. after he/she retires. Launched in 2015, the scheme was a part of the Union budget 2015-16 passed by the then Finance Minister Mr. Arun Jaitley.
To summarize, the scheme mainly targets the unorganized sector in India (maids, tailors, servants, etc.). However, the private sector employees who do not receive any such benefit from their employers can also subscribe to it.
Atal Pension Yojana is a replacement to Swavalamban Yojana which was a failure earlier. Under the scheme, the subscriber will get a fixed pension that ranges between Rs. 1000 to Rs. 5000 after the age of 60.
Furthermore, the amount received by the subscriber depends upon his age and the amount contributed by him. Pension Funds Regulatory Authority of India (PFRDA) manages the amount collected as pension under the scheme, therefore the scheme is safe and secure.
Also, for subscribers who joined the scheme between June 2015 to December 2015 for the next 5 years i.e. for financial years 2015-16 to 2019-20, the government provided a co-contribution.
Therefore, the eligible subscribers received 50% of the total contribution or Rs. 1000 (whichever is low) from the government.
However, the eligible subscriber must not be a taxpayer or must not be enrolled in another statutory social security scheme.
Also read, what is Pradhan Mantri Awas Yojana
What are the benefits of Atal Pension Yojana(APY)?
While providing financial security to people the scheme also encourages them to save in their productive years so that they can cover their expenses when their income earning capacity is low. Generally, following are the benefits of subscribing to Atal Pension Yojana –
- The scheme links your bank account to your pension account thereby making it easier to operate.
- The contributor can choose the amount of pension he wishes to receive after retirement and it all depends on the amount he contributes.
- This scheme is very affordable and hence the best for the unorganized sector. The minimum contribution for the scheme starts with Rs. 42 per month (if your age is 18 years).
- The government informs the subscribers about the status of their contribution usually via SMS alerts and account statements.
- There exists a provision of deductions for Income tax up to Rs. 50000 under section 80CCD (1B). Moreover, according to the Income-tax act 1961, the subscriber can claim income tax benefit under section 80CC for up to Rs. 1.5 lacs.
- Since the PFRDA controls the scheme which is a government agency, your money is no doubt safe and secure.
Who is eligible for Atal Pension Yojana(APY)?
There are certain criteria set by the Indian government which makes a person eligible to subscribe to the scheme. These are –
- Only an Indian citizen is eligible to subscribe.
- The applicant must be between 18-40 years of age.
- He/she must have an active bank account which linked with the Aadhar number.
- The subscriber must make contributions regularly for a minimum of 20 years.
- In addition to this, it is necessary to have a valid mobile number to apply for the pension scheme.
Also read, what is Pradhan Mantri Jhan Dhan Yojana
How to apply for Atal Pension Yojana(APY)?
Applying for APY is quite easy; just follow the below-mentioned steps –
- At first, you must open an APY account. Every nationalized bank provides this scheme, so you can approach the nearest branch of a nationalized bank and open an APY account there.
- Further, you need to fill the Atal Pension Yojana form which is available online on the bank’s website as well as at the bank. The form is available in English, Gujarati, Tamil, Telugu, Marathi, Odia, Kannada, and Bangla language.
- After filling the APY form submit it to the bank.
- Also, provide a valid mobile number and submit a photocopy of your Aadhar card in the bank.
- At last, upon approval of your application, you’ll receive a confirmation message for the same on the registered mobile number.
Atal Pension Yojana(APY) calculator for contributions
The amount paid as a contribution for the scheme depends on the age of the subscriber. He can pay it on a monthly basis, quarterly basis or even on a half-yearly basis. Here’s a chart showing the amount of contribution –
|Entry age||Remaining years of contribution||Monthly installment for Rs. 1,000 monthly pension/ corpus amount Rs. 1.7 lakh||Monthly installment for Rs. 2,000 monthly pension/ corpus amount Rs. 3.4 lakh||Monthly installment for Rs. 3,000 monthly pension/ corpus amount Rs. 5.1 lakh||Monthly installment for Rs. 4,000 monthly pension/ corpus amount Rs. 6.8 lakh||Monthly installment for Rs. 5,000 monthly pension/ corpus amount Rs. 8.5 lakh|
Provisions for default in payments
Incidentally, it may happen that due to certain situations a subscriber is therefore unable to contribute the required amount.
Stoppage in payments
Usually, if the subscriber doesn’t contribute for 6 months, then the account freezes. In case of no payments up to 12 months, the account will deactivate.
Furthermore, if the situation continues and the subscriber does not pay anything until 24 months, then finally the account closes permanently.
Delay in payments
Likewise, if the subscriber delays the payments then based on the amount the government levies the following penalties, for contributions –
- Up to Rs. 100 per month – Penalty of Re. 1
- Between Rs. 101 to Rs. 500 per month – Penalty of Rs. 2
- Between Rs. 501 to Rs. 1000 per month – Penalty of Rs. 5
- Above Rs. 1001 per month – Penalty of Rs. 10
However, if you want to withdraw from Atal Pension Yojana after reaching the age of 60, just visit the bank and apply for your pension. Subsequently, you’ll receive the complete pension amount.
Besides this, withdrawal from the scheme before reaching the age of 60 years is only possible in case of terminal illness or death.
If in case, the contributor dies, then his/her spouse can claim the pension and if both of them die (contributor and his/her spouse) then the nominee receives the pension.
Furthermore, if the subscriber dies before reaching the age of 60 years then his/her spouse or nominee gets an option wherein they can claim the corpus or can continue the scheme for the balanced period.