Atal Pension Yojana (APY)

The Atal Pension Yojana (APY) is a government-sponsored pension scheme launched in 2015 by the Government of India. It is designed primarily to support individuals in the unorganized sector, ensuring financial security during their retirement years. The scheme enables subscribers to contribute a fixed amount over time to receive a guaranteed monthly pension after the age of 60.

 

Key Features of Atal Pension Yojana

• Guaranteed Pension Benefits:
  • Pension ranges from ₹1,000 to ₹5,000 per month.
  • The amount is determined based on contributions and duration.
• Eligibility Criteria:
  • Open to Indian citizens aged 18-40 years.
  • Requires a savings bank account.
  • Not available to income tax payees.
• Contribution Period:
  • Minimum contribution of 20 years is required.
  • Contributions can be made monthly, quarterly, or half-yearly.
• Automatic Deduction:
  • Payments are auto-debited from the subscriber’s account.
  • Ensures a hassle-free contribution process.
• Government Co-Contribution (Limited Offer):
  • For subscribers who joined between June 1, 2015, and March 31, 2016.
  • Government contributed 50% of the amount or ₹1,000 per year (whichever was lower) for five years.

Objectives of APY

• Ensuring financial security for citizens by protecting them against medical emergencies, accidents, and long-term illnesses.
• Focusing on workers in the informal sector, helping them build a stable retirement fund.
• Providing a monthly pension from the accumulated corpus, with benefits extending to the spouse if the beneficiary passes away.
• If both the beneficiary and spouse are deceased, the nominee receives a lump sum payout.

Advantages of Enrolling in APY

• Financial Stability: Ensures a steady pension income post-retirement.
• Affordable Contributions:
  • Starts as low as ₹42 per month.
  • Amount depends on entry age and desired pension.
• Tax Benefits: Eligible for deductions under Section 80CCD of the Income Tax Act.

Advantages of Atal Pension Yojana

The Atal Pension Yojana (APY) offers the following benefits:

• Ensures financial stability for workers in the unorganized sector by providing protection against medical emergencies, accidents, and unforeseen risks.
• Supported by the Government of India, making it a secure investment with minimal risk.
• Open to all Indian residents, including both self-employed individuals and salaried professionals.
• Guarantees a fixed monthly pension between ₹1,000 and ₹5,000, depending on the subscriber’s contributions.
• In case of the subscriber’s death, the spouse continues receiving the pension; if both pass away, the nominee receives a lump sum amount.
• Contributions qualify for tax deductions under Section 80CCD (1) of the Income Tax Act, 1961.
• Flexible payment options allow subscribers to contribute monthly, quarterly, or half-yearly.
• Available to both organized and unorganized sector workers.
• Pension amount can be modified, allowing subscribers to increase or decrease their contributions as needed.
• Individuals enrolled in other private or government pension plans are also eligible to apply.

Eligibility for Atal Pension Yojana

To join the Atal Pension Yojana, applicants must meet the following criteria:

• Must be an Indian citizen between the ages of 18 and 40.
• Should have an active mobile number and a bank account linked to Aadhaar.
• Must fulfill ‘Know Your Customer’ (KYC) requirements.
• Should not have an existing APY account.
• Must commit to a minimum contribution period of 20 years.
• Individuals already receiving benefits from other government social welfare schemes are not eligible.
• Beneficiaries of the Swavalamban Scheme are automatically transferred to APY.

APY Account Registration and Login

To enroll in the Atal Pension Yojana, follow these steps:

• Registration can be done through any bank in India.
• Banks across the country assist in APY registration through NSDL or Karvy.
• Upon successful registration, subscribers receive a Permanent Retirement Account Number (PRAN).
• To access the APY account, subscribers need their PRAN along with the designated APY account password.
• Alternatively, the APY account can also be accessed through the NSDL portal using the PRAN and bank account details.

Enrollment Process

• Visit a Bank or Post Office: Approach an authorized bank or post office where you hold a savings account.
• Fill Out the Registration Form: Provide name, age, and desired pension amount.
• Submit Aadhaar and Mobile Number (Optional but Recommended): Helps in seamless verification and communication.
• Maintain Sufficient Balance:
  • Ensure the account has enough balance for the first contribution.
  • Future contributions are auto-debited based on the selected frequency.

Penalties for Delayed Contributions

• ₹1 per month for contributions up to ₹100.
• ₹2 per month for contributions between ₹101 and ₹500.
• ₹5 per month for contributions between ₹501 and ₹1,000.
• ₹10 per month for contributions above ₹1,001.

Atal Pension Yojana (APY) Investment Plan

The Atal Pension Yojana (APY) is a government-backed pension scheme that guarantees returns. Investments under this scheme are distributed across various financial instruments to ensure stability and growth. The allocation structure is as follows:

How to Contribute to an APY Account?

• Enable Auto-Debit: Provide your bank account details, mobile number, and authorization letter to the bank for automatic deductions.
• Choose a Payment Frequency: Contributions can be made monthly, quarterly, or half-yearly.
• Maintain Sufficient Funds: Ensure your linked bank account has adequate balance for seamless contributions.
• Aadhaar-Based Verification: To prevent disputes regarding pension entitlements, Aadhaar should be submitted as the primary document for Know Your Customer (KYC) verification, identifying the subscriber, spouse, and nominee.

Can APY Subscribers Modify Their Pension Amount?

• Annual Adjustment: Subscribers can increase or decrease their pension amount once a year, typically in April.
• Processing Fee: A nominal charge of ₹25 is applicable for modifying the contribution amount.
• Account Adjustment: If a subscriber downgrades their pension plan, the excess amount is credited directly to the linked bank account.
• Long-Term Commitment: To maximize benefits, subscribers are required to stay invested for at least 20 years.

Consequences of Missing APY Contributions

• Account Freezing: If payments are missed for six months, the account is temporarily frozen.
• Account Deactivation: After 12 months of non-payment, the account is deactivated.
• Account Closure: If no payments are made for 24 months, the account is permanently closed.
• Fund Recovery: Any outstanding contributions may be deducted from the linked bank account, subject to availability.
• Payment Reminders: Subscribers receive mobile alerts to notify them of pending payments and avoid penalties.

Atal Pension Yojana (APY) Calculation

The calculation of contributions under the Atal Pension Yojana (APY) is primarily based on two factors:

• The pension amount the subscriber wishes to receive.
• The subscriber’s age at the time of enrollment.

Contribution Requirements Based on Age

• Early Enrollment Advantage: Subscribers who enroll at a younger age benefit from lower monthly contributions.
• Example Contribution Requirements:
  • At 18 years of age, a minimum monthly contribution of ₹42 is required for a ₹1,000 pension.
  • At 40 years of age, a minimum contribution of ₹1,454 per month is needed for a ₹5,000 pension.

Subscribers can contribute on a monthly, quarterly, or half-yearly basis, based on preference.

APY Withdrawal Process

Eligibility for Withdrawal

• Pre-Maturity Withdrawal: Allowed only under exceptional circumstances (e.g., terminal illness or death).
• Normal Exit: Withdrawals are permitted only after reaching 60 years of age.

Step-by-Step Withdrawal Process

• Submit the Account Closure Form at the bank.
• Bank Processes the Request by calculating total contributions and interest accrued.
• Deductions for Charges before disbursing the final amount.
• Receiving the Final Amount directly in the bank account (cash withdrawals not allowed).
• Withdrawal After 60 Years: Pension payout starts after submitting an application.
• Early Withdrawal in Case of Death: Pension transfers to spouse or nominee.

Atal Pension Yojana (APY) FAQs

• Can I have multiple APY accounts?
  No, each subscriber is allowed only one Atal Pension Yojana (APY) account, which remains unique to them.
• Is a savings account required for APY?
  Yes, having a savings bank account is mandatory to enroll in the Atal Pension Yojana scheme.
• Can I open an APY account without an Aadhaar number?
  Aadhaar is not required when opening the account, but it will be necessary to add nominees, beneficiaries, and spouse details.
• How can I check my APY account balance?
  You can track your balance through periodic statements and SMS alerts sent to your registered mobile number.
• Can I modify my APY contribution amount?
  Yes, you can increase or decrease your contribution once a year, typically in April.
• How is the due date for APY contributions decided?
  The due date is determined based on the date of your first deposit.
• What happens if I don’t have enough funds for my contribution?
  If your account lacks sufficient funds, a penalty will be applied for missed payments.
• How do I make APY contributions?
  Set up an auto-debit from your linked savings account. Contributions can be made monthly, quarterly, or half-yearly.
• Can I change my pension payout amount under APY?
  Yes, you can adjust your pension amount once a year in April for a fee of Rs. 25. However, you must contribute for at least 20 years to maintain your APY account.
• What happens if I stop contributing?
  • After 6 months: Your account gets frozen.
  • After 12 months: Your account is deactivated.
  • After 24 months: Your account is automatically closed.
• Can missed contributions be recovered?
  Yes, missed payments can be deducted from your linked account if funds are available. You will also receive alerts to remind you of due payments.
• What tax benefits does APY offer?
  APY contributions qualify for tax benefits under Section 80C (up to Rs. 1.5 lakh per year) and an extra Rs. 50,000 under Section 80CCD(1), similar to the National Pension Scheme (NPS).
• Can Employees Provident Fund (EPF) members enroll in APY?
  Yes, EPF subscribers are eligible to join the Atal Pension Yojana.
• Is it mandatory to provide nominee details?
  Yes, nominee details, along with Aadhaar information for both the nominee and spouse, must be provided when enrolling.
• What happens if I become an NRI?
  APY is only for Indian citizens. If you become an NRI, your account will be closed, and the accumulated amount will be refunded as an early exit before the age of 60.
• Can I continue APY contributions if I move to a different city?
  Yes, your APY contributions remain unaffected since payments are made through auto-debits.
• How do I open an APY account?
  Fill out the APY subscription form, provide your Aadhaar number and mobile number, submit the form to your bank, and activate auto-debits from your savings account.
• Is there customer support for APY queries?
  For assistance, contact your bank or reach out to the Central Recordkeeping Agency (1800-222-080) or NPS Helpdesk (1800-110-708).
• What services does the APY mobile app provide?
  The APY app lets users check account balances, view contributions, access account details, and review transaction history.
• Is the APY app free to use?
  Yes, the Atal Pension Yojana app is free and available on Android devices.