Atal Pension Yojana (APY) for Social Security in India

Financial inclusion and a universal social security system have been high on the National Democratic Alliance government’s agenda. Ever since the BJP came to power at the centre, PM Narendra Modi, former Finance Minister 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 then 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:

• Firstly, you need to visit the bank where your APY account is held.
• You will be required to fill out and submit the closure form.
• After submitting the closure form, you need to wait for the bank to go further ahead with the procedure.
• The money present in the APY account will be transferred to the bank account that you provided along with the interest you have received up until then, a confirmation will be sent by the bank regarding the closure of the account.

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: Yes, you can exit the scheme if you want to. You will be provided with a closure form and will need to visit the bank where you have your APY account.

APY Application Form

The application form can be downloaded from https://npscra.nsdl.co.in/nsdl/forms/APY_Subscriber_Registration_Form.pdf  .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)

*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.

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

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

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

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

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 3.68 Crore
• As new 65 lakh subscribers join the Atal Pension Yojana in the FY 2021-22, the total number of subscribers to the scheme has crossed the mark of 3.68 crore. In the scheme enrolment, the top contributors are people from the states of Karnataka, Maharashtra, Andhra Pradesh, Bihar, and Uttar Pradesh. As January 2022, the APY subscribers from Karnataka are 19.15 lakh, from Andhra Pradesh are 19.80 lakh, from Maharashtra are 25 lakh, from Bihar are 31.16 lakh, and from Uttar Pradesh are 49.65 lakh.

How to track ‘Atal Pension Yojana’ account.

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 (PRAN).
• If you want to search without PRAN, you can still access your account by providing additional details like bank account, date of birth and beneficiaries name.
• Now, you will have two options-APY e-PRAN view or Statement transaction View depending on your requirement.
• APY account holder can check their transaction details here: https://www.npscra.nsdl.co.in/scheme-details.php
• How to track APY using your mobile phone?

• Start by downloading the APY and NPS lite mobile app.
• Now enter the PRAN details and tap on login.
• An OTP will be sent to your registered mobile number.
• Now you will be able to access the investment amount in the scheme and also you can view your statement and the deposits you have made in the scheme.

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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