Atal Pension Yojana (APY) Image

Financial inclusion and a universal social security system have been high on the NDA government’s agenda. Ever since the BJP came to power at the centre, PM Narendra Modi, FM Arun Jaitley and the Cabinet have worked towards promulgation of new schemes that give financial security to the common man. The first step towards the achievement of social security was the rollout of the Pradhan Mantri Jan Dhan Yojana (PMJDY). With Phase I being declared a major success and 1.8 crore accounts having been opened across the country, the government flagged off three new schemes on May 9, 2015: two insurance schemes (Pradhan Mantri Jeevan Jyoti Bima Yojana and Pradhan Mantri Suraksha Bima Yojana) and one pension scheme (Atal Pension Yojana). This is called Phase II of the PMJDY since it was important to get people into mainstream banking before any benefits could be extended to them.

Atal Pension Yojana

“As our young population ages, it is also going to be pension-less. Encouraged by the success of the Pradhan Mantri Jan Dhan Yojana, I propose to work towards creating a universal social security system for all Indians that will ensure that no Indian citizen will have to worry about illness, accidents or penury in old age,” said Finance Minister Jaitley in his 2015-16 Union Budget speech. In keeping with this ideal, a National Pension Scheme, the Atal Pension Yojana was effected from May 2015. The scheme intends to bring pension benefits to people of the unorganised sector so that they can enjoy social security with a minimum contribution per month. People who work in the private sector or are employed in occupations that do not give them the benefit of pension can apply for this scheme. They can opt for a fixed pension of INR 1,000 or 2,000 or 3,000 or 4,000 or 5,000 on attaining the age of 60. The amount of contribution and the individual’s age will determine the pension. Upon the contributor’s death, the spouse of the contributor can claim the pension and after the spouse’s death, the nominee will be returned the corpus accrued. The amount collected under the scheme is to be managed by Pension Funds Regulatory and Development Authority of India (PFRDA) as per the investment pattern specified by the Government of India. Individual applicants will have no choice of pension funds or investment allocation

Benefits of Atal Pension Yojana (APY)

The Atal Pension Scheme will bring security to ageing Indians while at the same time promote a culture of savings and investment among the lower and lower-middle-class sections of society. One of the greatest benefits of the scheme may be enjoyed by the poorer sections of society. The government of India decided to contribute 50% of the user’s contribution or INR 1,000 a year (whichever is lower) for a period of five years. This contribution, however, was enjoyed only by those who were not income taxpayers and those who joined the scheme before December 31, 2015.

Tax Benefits:

Also, as per the circular released by the Income Tax department, contributions to the Atal Pension Yojana (APY) are now eligible for the same tax benefits as the National Pension System (NPS). The tax benefits include an additional deduction of up to Rs 50,000 under section 80CCD(1) of the Income Tax Act, over and above 80C tax benefits.

Other Benefits:

One gets a guaranteed monthly pension ranging from Rs. 1000-5000. In case of the death of the subscriber, the pension goes to his/her spouse. In case both dies, then the entire corpus is given to the nominees.

Exit Policy:

The subscribers to the scheme are even allowed to have a premature exit but only in exceptional circumstances, like in the case of terminal disease or death.

Who is Eligible for Atal Pension Yojana?

The Atal Pension Yojana (APY) is open to all Indians between the age of 18 and 40. This allows an individual to contribute for at least 20 years before reaping the benefits of the scheme. Any bank account holder who is not a member of any statutory social security scheme can avail of the scheme. All existing members of the government’s ‘Swavalamban Yojana NPS Lite’ will automatically be migrated to the Atal Pension Yojana. It will now replace the Swavalamban scheme, which did not gain much popularity across the country.

How to Enroll for Atal Pension Scheme?

To sign up for the Atal Pension Yojana, an account holder must fill in an authorisation form and submit it to his/her bank. The form will require complete details including account number, spouse and nominee details, and authorisation for auto debit of the contribution amount. Account holders signing up for the scheme need to ensure that sufficient balance is maintained in the account every month, failing to do so will attract a monthly fine of –

  • INR 1 for a monthly contribution up to INR 100
  • INR 2 for a monthly contribution between INR 101 and INR 500
  • INR 5 for a monthly contribution between INR 501 and INR 1,000
  • INR 10 for a monthly contribution beyond INR 1,001

If no payment is made towards the scheme

  • for six months, the holder’s account will be frozen
  • for 12 months, the holder’s account will be deactivated
  • for 24 months, the holder’s account will be closed

For those who does not have a bank account: A person needs to open a bank account first by submitting the KYC document and Aadhar card. He/she is also required to submit the APY proposal form.

Exiting the scheme: Under ordinary circumstances, an account holder who has enrolled for the Atal Pension Yojana will not be able to exit the scheme before the age of 60. Exiting the scheme is only possible in special circumstances such as in the event of the death of the beneficiary.

APY Application Form

The application form can be downloaded from  http://www.jansuraksha.gov.in/FORMS-APY.aspx. The forms are available in different languages – English, Hindi, Gujarati, Bangla, Kannada, Odia, Marathi, Telugu and Tamil. Indicative Contribution for Various Pension Options (in INR)

Entry Age Years of Contribution Monthly Pension INR 1000 Monthly Pension INR 2000 Monthly Pension INR 3000 Monthly Pension INR 4000 Monthly Pension INR 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 28 138 276 414 551 689
33 27 151 302 453 602 752
34 26 165 330 495 659 824
35 25 181 362 543 722 902
36 24 198 396 594 792 990
37 23 218 436 654 870 1,087
38 22 240 480 720 957 1,196
39 21 264 528 792 1,054 1,318
40 20 291 582 873 1,164 1,454

*Data from Atal Pension Yojna brochure

Launch Across the Country

The Atal Pension Scheme and the other insurance schemes were launched on 9 May 2015 simultaneously by Union and Chief Ministers. Prime Minister Narendra Modi launched the scheme from Kolkata.

Age of Joining Years of Contribution Indicative Monthly Contribution (in Rs.) Monthly Pension to the subscribers and his spouse (in Rs.) Indicative Return of Corpus to the nominee of the subscribers (in Rs.)
18 42 42 1000 1.7 Lakh
20 40 50 1000 1.7 Lakh
25 35 76 1000 1.7 Lakh
30 30 116 1000 1.7 Lakh
35 25 181 1000 1.7 Lakh
40 20 291 1000 1.7 Lakh

Table of contribution levels, for fixed monthly pension of Rs. 2,000 per month to subscribers and his spouse and return of corpus to nominees of subscribers and the contribution period under Atal Pension Yojana

Age of Joining Years of Contribution Indicative Monthly Contribution (in Rs.) Monthly Pension to the subscribers and his spouse (in Rs.) Indicative Return of Corpus to the nominee of the subscribers (in Rs.)
18 42 84 2000 3.4 Lakh
20 40 100 2000 3.4 Lakh
25 35 151 2000 3.4 Lakh
30 30 231 2000 3.4 Lakh
35 25 362 2000 3.4 Lakh
40 20 581 2000 3.4 Lakh

Table of contribution levels, for fixed monthly pension of Rs. 3,000 per month to subscribers and his spouse and return of corpus to nominees of subscribers and the contribution period under Atal Pension Yojana

Age of Joining Years of Contribution Indicative Monthly Contribution (in Rs.) Monthly Pension to the subscribers and his spouse (in Rs.) Indicative Return of Corpus to the nominee of the subscribers (in Rs.)
18 42 126 3000 5.1 Lakh
20 40 150 3000 5.1 Lakh
25 35 226 3000 5.1 Lakh
30 30 347 3000 5.1 Lakh
35 25 543 3000 5.1 Lakh
40 20 873 3000 5.1 Lakh

Table of contribution levels, for fixed monthly pension of Rs. 4,000 per month to subscribers and his spouse and return of corpus to nominees of subscribers and the contribution period under Atal Pension Yojana

Age of Joining Years of Contribution Indicative Monthly Contribution (in Rs.) Monthly Pension to the subscribers and his spouse (in Rs.) Indicative Return of Corpus to the nominee of the subscribers (in Rs.)
18 42 168 4000 6.8 Lakh
20 40 198 4000 6.8 Lakh
25 35 301 4000 6.8 Lakh
30 30 462 4000 6.8 Lakh
35 25 722 4000 6.8 Lakh
40 20 1164 4000 6.8 Lakh

Table of contribution levels, for fixed monthly pension of Rs. 5,000 per month to subscribers and his spouse and return of corpus to nominees of subscribers and the contribution period under Atal Pension Yojana

Age of Joining Years of Contribution Indicative Monthly Contribution (in Rs.) Monthly Pension to the subscribers and his spouse (in Rs.) Indicative Return of Corpus to the nominee of the subscribers (in Rs.)
18 42 210 5000 8.5 Lakh
20 40 248 5000 8.5 Lakh
25 35 367 5000 8.5 Lakh
30 30 577 5000 8.5 Lakh
35 25 902 5000 8.5 Lakh
40 20 1454 5000 8.5 Lakh

Recent Developments

  • The government will extend the benefit of the APY via Post Offices all over the country so as to bring more people under its ambit. The implementation of the scheme through post offices is expected to be more helpful for the people in rural areas.
  • In March 2016, the government amended the scheme’s provisions to give the subscriber’s spouse an option to continue contributing to the account for the balance period on the premature death of the subscriber.
  • The Government released Rs 100 crore towards its co-contribution for Atal Pension Yojana (APY) in 2015-16 fiscal.
  • Also, as per the circular released by the Income Tax department, contributions to the Atal Pension Yojana (APY) are now eligible for the same tax benefits as the National Pension System (NPS). The tax benefits include an additional deduction of Rs 50,000 under section 80CCD(1) introduced in the year 2015 Budget.
  • To increase the outreach of Atal Pension Yojana (APY) among the prospective subscribers in the country, The Pension Fund Regulatory and Development Authority of India (PFRDA), on August 19, 2016, has integrated the APY module with the bank’s core banking system, allowing enrollments to happen through people’s saving accounts. It will not only make the process convenient but a whole lot faster and hassle-free. The customers would not be required to submit physical forms to the bank from now on, and a web-based APY subscriber registration mode has been allowed for customers with net-banking accounts.

APY Subscribers Are Now More than 1.24 Crore

As new 27 lakh subscribers join the Atal Pension Yojana in the FY 2018-19, the total number of subscribers to the scheme has crossed the mark of 1.24 crore. In the scheme enrolment, the top contributors are people from the states of Karnataka, Maharashtra, Andhra Pradesh, Bihar, and Uttar Pradesh. As of 27 October 2018, the APY subscribers from Karnataka are 9.15 lakh, from Andhra Pradesh are 11.28 lakh, from Maharashtra are 10 lakh, from Bihar are 11.16 lakh, and from Uttar Pradesh are 17.90 lakh.

How to track ‘Atal Pension Yojana’ account

A few months back, the finance ministry had also launched a facility whereby subscribers can view online their statement of the transaction. This would benefit more than 45 lakh subscribers of the Atal Pension Yojana. The subscriber can view his or her account statement by providing the savings bank account number and the Permanent Retirement Account Number. APY account holder can check their transaction details here:
https://npslite-nsdl.com/CRAlite/EPranAPYOnloadAction.do

National Toll-Free Number – 1800-180-1111 / 1800-110-001

Click here to view Atal Pension Yojana (APY) in Hindi – अटल पेंशन योजना (एपीवाई)

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