Atal Pension Yojana (APY) is a pension scheme launched by the Government of India in 2015 that offers a fixed pension from the age of 60 years based on contributions made during the working life of an individual.
It is a voluntary, contributory pension system focused on the unorganized sector workers. The unique features include: basic level of guaranteed monthly pension, fixed income guaranteed by government, and life insurance cover.
The objective of APY is to provide social security benefits to individuals not covered under any Pension System nor employed with employers providing provident fund (PF) benefits. The scheme provides for old age protection for Employers, Employees, Self Employed Persons & Unorganized Workers (Surtis).
It aims at addressing old-age security needs, particularly those from the unorganized sector workers by providing them with minimum assured pensions which are backed and guaranteed by the Government of India.
The monthly pension amount can range between Rs 1000 to Rs 5000 per month depending on contributions made and its periodicity also varies from individual to individual.
The APY allows subscribers an option to exit & receive their balance in savings bank account at any time before attaining 60 years of age.
In case death occurs before attainment of 60 years or before closure/suspension/premature exit cancellation under specified conditions; then widow/nominees will receive the entire accumulated corpus including subscribers’ contribution+interest+Govt.
subsidies as death benefit under APY scheme which can be withdrawn by submitting KYC documents along with death proof documentary evidences.
Eligibility Criteria for Atal Pension Yojana
Atal Pension Yojana is a social security pension scheme backed by the Government of India. Individuals aged 18 years and above and not covered under existing social security programs are eligible to join this scheme.
To be eligible, an individual must have a savings bank account or Jan-Dhan account and should contribute regularly in the pension plan to get the specified pension after attaining 60 years of age.
The Atal Pension Yojana scheme support is available only to individual accounts and subject to the following eligibility criteria:
– The account holder should be between 18-40 years of age.
– The minimum contribution amount is INR 1,000/- per annum while any other voluntary contribution can be as per choice of subscriber within the prescribed limit of INR 4.5 Lakhs on accumulation corpus at the time of exit from APY, subject to maximum period of 20 years for payment cycle or 65 Years whichever is earlier.
– Members who have already registered for Pradhan Mantri Jan Dhan Yojana will now need give their Aadhaar number for APY registration, making it an Aadhaar based financial inclusion system; however those not having an Aadhaar number will needed to make a physical application enrolling for APY separately with necessary KYC documents including 180 day Bank account Statement during registration process.
– Every subscriber can opt family members as beneficiary(s) in case the subscribing member’s death (either due to illness or accident). In this event, minimum guaranteed monthly pension amount shall be made available to both surviving spouses (in case if both spouse were initially subscribed).
Benefits of Atal Pension Yojana
Atal Pension Yojana (APY) is an upcoming pension scheme initiated by the Government of India that aims to provide a regular income for subscribers during their retirement. It provides a comprehensive social security cover to those who have no access to any form of either formal or informal pension.
APY is one of the flagship programs launched under the Pradhan Mantri Jan Dhan Yojana and will be administered by Ministry of Finance, Government of India through its multiple implementing agencies.
The scheme offers a guaranteed minimum pension ranging from Rs 1,000 per month to Rs 5,000 per month based on the monthly contribution made during working years and offers other attractive benefits for subscribers:
-Contributors aged between 18-40 years can join APY with a minimum contribution of Rs. 42 /month up to maximum contributions varying based on age and final desired pension amount.
-Under APY, subscriber’s life insurance coverage is also provided by Life Insurance Corporation (LIC).
-The amount contributed towards APY with statutory contributions made by Central Government or State Governments are eligible for 80C benefit under IT Act 1961.
-Employers are also eligible for tax deduction which increases employees’ take home benefits under this scheme.
-On death before completion of 60 years, spouse can continue contributing in order to avail pension later after attainting age 60 as per applicable terms & conditions then prevailing set by PFRDA from time to time.
-Contribution amount of Rs 1 lakh will be refunded in case subscriber does not survive till beginning date for receiving the fixed annuity benefit.
-The age limit for joining the scheme has been relaxed from existing 40 years to 50 years during transition period until 31 March 2020 for those who have already crossed age limit 40 during initial launch phase contributing any where between June 2015 & December 2018 as members joining from Jan 2019 onwards must meet eligibility criteria listed in Atal Pension Yojana Scheme Circular released on May 19th 2015 .
How to Apply for Atal Pension Yojana
Atal Pension Yojana (APY) is a government-backed pension scheme targeted at people in the unorganized sector. It provides financial security after retirement to subscribers by offering a regular pension which varies according to the contribution and the age of entry.
The main objective of this scheme is to provide social security cover to all citizens, especially those belonging to economically weaker sections. In order to apply for Atal Pension Yojana, one needs to satisfy these criteria:
•The applicant should be between 18 and 40 years of age
•A valid Permanent Account Number (PAN) or Aadhaar number must be provided
•Bank account details as well as existing bank passbook/ statement must be submitted
•And copies of identity proof and residential address proof must be provided
Applicants can submit their application for APY either online or offline. To apply online, applicants need to register on the National Pension System (NPS) website. They will then have to fill up an application form and submit the required information along with doing their KYC verification.
Once their form is processed and accepted, applicants will receive an NPS subscriber ID by email or post within 15 days of registering with NPS. This ID can then be used while making any contributions towards APY.
To apply offline, applicants need fill up a physical copy of Atal Pension Yojana application form available in various banks like SBI, Bank of Baroda, ICICI Bank etc., and submit this along with required documents like PAN Card/ Aadhaar card copy and passbook or bank statement once original documents are verified at respective branches by respective bank officials in accordance with KYC regulations applicable in India.
Once application process is completed they will track Atal Pension Yojana Application Status using NPS subscriber ID issued subsequently after successful completion of entire process.
Documents Required for Atal Pension Yojana
Atal Pension Yojana (APY), launched by Government of India, provides guaranteed pension payments to citizens aged between 18 and 40. The pension amount is based on your contributions accumulated during the term of the policy and it differs for members aged between 18-40 years.
While enrolling for APY, you need to provide certain documents to ensure that your application is accepted. Here are the documents required for Atal Pension Yojana:
1. Self-attested copy of Identity Card – You need to provide your Passport, PAN Card, Driving License or Aadhar Card as proof of identity while enrolling in APY scheme.
2. Self-attested copy of Address Proof – Utility bills and bank statements can be used as address proof by customers while enrolling in APY scheme.
3. Recent Passport size photograph – You need to provide two passport size photographs for submission along with other required documents at the time of registration for legal verification purposes.
4. Bank Account Details – Your bank account number and IFSC code must be provided at the time of enrollment to link up your account with APY scheme policy purchased by you from bank/PFRDA approved intermediaries/pension service providers such as banks or business correspondents or any other entities approved by PFRDA through a notified onboarding procedure.
5. Canceled cheque – Cancelled cheque in which you have written full name should also be provided along with all other documents upon enrollment in Atal Pension Yojana scheme.
Contribution to Atal Pension Yojana
The Atal Pension Yojana (APY) is a major social security initiative launched by the Government of India in 2015. The main objective of APY is to provide pension benefits to all citizens in the country, especially those from economically weaker sections of the population who lack sufficient resources for post-retirement life.
The scheme encourages individuals to save regularly for their retirement, offering an attractive interest rate and tax benefits.
Under this scheme, all eligible citizens between the age group of 18 to 40 years may contribute periodically from as low as Rs 42 per month up to Rs 541 per month depending on their chosen contribution amount and its corresponding guaranteed pension amount.
Any contribution made above Rs 541 per month will not be eligible for any additional benefit. Contributions can be made through auto-debit facility, bank account, NPS-lite accounts or Jan Dhan accounts held in any scheduled bank or designated post offices across India.
In addition to periodic contributions, there are certain minimum conditions that need to be fulfilled such as:
1) An individual must have a valid Permanent Account Number (PAN).
2) Should have opened a savings bank account.
3) Must make his/her First Contribution within one year of registration.
4) Must continuously contribute for at least 20 years.
5) The subscriber must remain active till the time he/she has completed at least 10 years of contributions.
6) The minimum age at entry should not be less than 18 years & maximum should not exceed 40 years.
7) In case of death, spouse should continue with APY.
8 ) If either subscriber and spouse dies before attaining 60 years, nominee would receive all accumulated pension wealth along with applicable guarantee return on investment.
Withdrawal from Atal Pension Yojana
When it comes to withdrawing from the Atal Pension Yojana (APY), the typically accepted time frame is 5 years after you have stopped contributing to the scheme. This allows retirees to begin availing their APY benefits and withdrawing their entire corpus at any time post maturity.
However, you are not allowed to withdraw your contributions before completing 5 continuous years of subscription.
In case of death of a subscriber, APY will be transferred to his or her named nominee who will then be at liberty to withdraw or continue with the plan as per their wish.
On withdrawal, the pension fund, return on investment , and government co-contribution (only if applicable) will all be handed over to the nominee in one lump sum payment . The same amount can also be withdrawn incrementally over a period of time.
Upon retirement from work or if aged 60 or more and with complete subscription records evidencing all contributions made towards APY scheme by a subscriber while employed and within contributory period, such subscribers may discontinue his/her APY account with all associated benefits and take out their entire accumulated corpus upon submission of requisite application forms along with necessary documents accordingly.
Upon retrieval of such subs subscribes can opt for alternate retirement security plan suitable for their needs as advised by NPS Point-of-Presence or authorized branch as applicable.