Atal Pension Yojana Scheme Details: Atal Pension Yojana (APY) is a formal pension scheme which would benefit people when they are 60 years old. This scheme is mainly for workers in the unorganized sector. Atal Pension Yojana will encourage the habit of saving people for their retirement. The scheme will be administered by the Pension Fund Regulatory and Development Authority (PFRDA). Atal Pension Yojana replaces the previous governments Swavalamban Yojana NPS Life. The central government sanctions a half amount of it. Atal Pension Yojana (APY) is open to all bank account holders. The Central Government would also co-contribute 50% of the total contribution or Rs. 1000 per annum, whichever is lower, to each eligible subscriber, for a period of 5 years, i.e., from Financial Year 2015-16 to 2019-20. The offer is applicable to those applicants who join the APY before 31st December 2015 and who are not members of any statutory social security scheme are and who are not income tax payers. Therefore, APY will be focused on all citizens in the unorganized sector.
Atal Pension Yojana Scheme Details
The monthly pension under APY would be available to the subscriber, and after him to his spouse. The pension corpus, as accumulated at age 60 of the subscriber, would be returned to the nominee of the subscriber, if both the subscriber and their spouse death. The subscribers of Atal Pension Yojana would receive the fixed minimum pension of Rs. 1000 per month, Rs. 2000 per month, Rs. 3000 per month, Rs. 4000 per month, Rs. 5000 per month, at the age of 60 years, depending on their contributions, which itself would be based on the age of joining the APY. Therefore, the benefit of minimum pension would be guaranteed by the Government. However, if higher investment returns are received on the contributions of subscribers of Atal Pension Yojana, the higher pension would be paid to the subscribers.
Major Points of the Atal Pension Yojana Scheme
- The minimum age for joining this scheme is 18 years and maximum age is 40 years.
- Subscribers who are already enrolled in Swavalamban Scheme would be automatically migrated to Atal Pension Yojana unless they opt out.
- Under the scheme, a subscriber can contribute for a minimum period of 20 years or more and pension payment will start at the age of 60 years.
- All savings bank account holders under the eligible category may join the Atal Pension Yojana scheme with auto-debit facility to accounts, leading to a reduction in contribution collection of charges.
- The subscribers who will join the Atal Pension Yojana scheme would receive the fixed pension of Rs. 1,000 per month, Rs. 2,000 per month, Rs. 3,000 per month, Rs. 4,000 per month, Rs. 5,000 per month, at the age of 60 years, depending on their contributions.
Benefits in joining Atal Pension Yojana scheme
The benefit of minimum pension under Atal Pension Yojana would be guaranteed by the Government of India. That means if the actual realized returns on the pension contributions are less than the assumed returns for minimum guaranteed pension, over the period of contribution, then such shortfall shall be funded by the Government. On the other hand, if the actual returns on the pension contributions are higher than the expected returns for minimum guaranteed pension, over the period of contribution, such excess shall be credited to the subscribers account.
Atal Pension Yojana is a very good pension scheme in the market which gives guaranteed benefits to the subscribers. At present, a subscriber under the National Pension System (NPS) is eligible to get a tax benefit for the contribution, up to a ceiling, and even for the investment returns on such contributions. Further, the purchase price of the annuity on exit from NPS is also not taxed and only the pension income of the subscribers are considered to be part of normal income and taxed at the appropriate marginal rate of tax, applicable to the subscriber. It is proposed that a similar tax treatment may be given to the subscribers of APY. However, presently, a similar tax dispensation, on par with that available under NPS, is yet to be accorded to subscribers under Atal Pension Yojana.
Procedure For Opening APY Account
Individuals can open Atal Pension Yojana Account easily by following these steps in a home branch of bank or post office where the hold a savings bank account. People can also apply through online using internet banking easily resting at home.
- Approach the bank or post office where the individuals savings bank account is held or open a savings account if the subscriber does not have one.
- Provide the Bank or Post office savings bank account number and with the help of the Bank staff, fill up the APY registration form.
- Provide Aadhaar & Mobile Number. This is not mandatory, but may be provided to facilitate the communication regarding contribution.
- Ensure keeping the required balance in the savings bank account for transfer of monthly/quarterly/half yearly contribution.