All You Need to Know About Atal Pension Yojana

What is the Atal Pension Yojana (APY)?

The Atal Pension Yojana is a government pension plan that gives you a monthly income after the age of 60. It is mostly for people who work in the unorganized sector, like delivery boys, drivers, helpers, etc. Private employees who don’t get a pension from their companies can also apply if they meet the eligibility criteria. The APY scheme is managed by the Pension Fund Regulatory and Development Authority (PFRDA).

How does the Atal Pension Yojana work?

You can join the APY pension scheme between the age of 18 and 40. You choose how much pension you want from the guaranteed minimum pension options per month after turning 60. Based on that, you pay a fixed amount. Once you turn 60, you start receiving the selected pension amount.

• If you die before 60: The spouse can continue paying contributions until you have turned 60. After this period, the spouse will receive a pension for life.
• If you die after 60: The spouse continues to receive the same pension for life. Once both pass away, the nominee receives the entire accumulated pension corpus (contributions plus returns).

What are the Advantages of the Atal Pension Yojana?

Here are the benefits of Atal Pension Yojana:

• Steady Monthly Income: You get a fixed income every month after 60.
• Family Benefits: Your spouse and nominee get benefits after you, subject to the terms of the scheme.
• Flexible Contributions: You can choose how much to contribute.
• Tax Benefits: Contributions are eligible for tax benefits under Section 80CCD (1) and 80CCD(1B), under the old tax regime (subject to the conditions and limits specified in the Income Tax Act).
• Secure Retirement: Helps in retirement planning for a peaceful future.
   

Key Features of the Atal Pension Yojana

Modifying Contribution and Pension Amount

Once a year, you can increase or decrease your contribution based on your income during the course of accumulation phase.

Automatic Debit of Contributions

Your contribution is automatically debited from your bank account.

Eligible Age for Enrollment

You can join the scheme if your age is between 18 and 40 years.

Assured Monthly Pension

You can choose a pension amount of ₹1000, ₹2000, ₹3000, ₹4000 or ₹5000 per month, depending on your contribution.

Rules for Withdrawal from APY

You can exit the scheme at age 60 and start receiving the pension. Early exit is allowed only in case of death of subscriber or terminal illness.

Late Payment Penalties and Charges

Late payment attracts penalties:

• Penalty of ₹1 for contributions up to ₹100 per month
• Penalty of ₹2 for contribution from Rs. 101 to ₹500 per month
• Penalty of ₹5 for contribution from Rs. 501 to ₹1000 per month
• Penalty of ₹10 for contribution of ₹1001 and above per month
   

Who is Eligible for the Atal Pension Yojana?

To join the APY Yojana, you must:

• Be a citizen of India.
• Be aged between 18 and 40 years.

Have a savings bank account linked with Aadhaar or post office savings bank account

• From 1st October 2022, anyone who is or has been an income-tax payer under the Income-tax Act, 1961, cannot open a new APY account.
   

Conclusion

The Atal Pension Yojana scheme is a simple and secure way to prepare for retirement. It helps people, especially those without a formal pension, to receive a monthly income after 60. With its easy joining process, flexible contributions, and family support options, the APY scheme offers peace of mind. If you are between 18 and 40 and not covered by any pension plan, this can be a useful part of your retirement planning. It's a step toward building financial security for your future.

FAQs

What is the benefit of Atal Pension Yojana?

It provides a fixed monthly pension after age 60 to help cover basic living expenses.

Is APY a good investment?

APY can be a good savings plan if you are looking for a government-backed pension after 60.

Are APY contributions monthly or yearly?

APY contributions can be done monthly, quarterly or half-yearly.