Atal Pension Yojana Scheme (APY): Benefits, & Fixed Pension

The Atal Pension Yojana Scheme (APY Scheme) is government-backed in India aimed at providing financial security to citizens of the unorganized sector after the age of 60. In 2015, Prime Minister Narendra Modi initiated the launch.

What is the Atal Pension Yojana Scheme?

Atal Pension Yojana Scheme (APY) is a social security scheme launched by the Government of India in 2015. The primary objective of this scheme is to provide a sustainable pension to the unorganized sector workers who are not covered by any formal pension scheme. This is named in honor of Atal Bihari Vajpayee, a former Prime Minister of India.

What are the Benefits of Atal Pension Yojana ?

There are so many benefits to avail of APY such as it provides guaranteed minimum pension, government co-contribution, tax benefits, flexibility in contributions, etc.

• Guaranteed Minimum Pension: On reaching the age of 60, subscribers will receive a guaranteed minimum monthly pension of Rs 1,000, Rs 2,000, Rs 3,000, Rs 4,000, or Rs 5,000, depending on their chosen contribution amount. This provides financial security after retirement, especially for those who work in the unorganized sector and may not have other pension plans
• Government Co-contribution: The government will co-contribute to the subscriber's account up to Rs 1,250 per year for five years. This means the government adds extra money to your contributions, boosting your overall savings and future pension amount.
• Tax Benefits: Contributions to APY are eligible for tax deductions under Section 80CCD(1) of the Income Tax Act. This can help you reduce your taxable income and save on taxes.
• Flexibility in Contributions: You can choose to contribute a monthly amount ranging from Rs 1,000 to Rs 5,000, depending on your budget and affordability. 
• Death Benefits: In case of the subscriber's death, the spouse will continue to receive the pension benefits. If both the subscriber and spouse pass away, the nominee will receive the accumulated pension wealth. 

Atal Pension Yojana Chart

Here is the Atal Pension Yojana Chart which shows how much pension you will get at what entry age, and how many years you have to contribute.

How to Apply for Atal Pension Yojana Scheme?

To open an Atal Pension Yojana Scheme (APY) account, you can follow these steps to open the account seamlessly.

Step 1: Go to the nearest bank branch and get the “Atal Pension Yojana Registration Form” or download it from here.

Step 2: Complete the registration form with accurate and up-to-date information. Provide details such as your name, address, age, nominee details, Aadhaar number, bank account number, and mobile number.

Step 3: Submit the filled-in registration form along with any supporting documents, such as a copy of Aadhaar card, to the bank officials.

Step 4: Select the pension amount you wish to receive and the contribution period based on your age and financial capacity, and provide authorization for auto-debit from your bank account. 

Step 5: Your first contribution amount will be deducted from your linked bank account at the time of account opening. The bank will provide you with a receipt number or PRAN (Permanent Retirement Account Number).

Step 6: After the account is opened, you will receive a PRAN card (Permanent Retirement Account Number) from the National Pension System (NPS) Central Recordkeeping Agency (CRA). This card will have your unique PRAN, and it is essential for tracking your contributions and pension details.

Atal Pension Yojana Eligibility

The Atal Pension Yojana (APY) is a social security program supported by the government of India, created to offer a consistent monthly pension to individuals working in the informal sector.

Here are the eligibility criteria:

• Age of the Subscriber: The minimum age to join the Atal Pension Yojana Scheme is 18 years, and the maximum age to enroll is 40 years.
• Not Already Covered by Any Social Security Scheme: Individuals who are already covered under any social security scheme are not eligible to enroll in APY.
• Bank Account: It is recommended for the subscriber to open a savings bank account. If the subscriber doesn't have a bank account, they need to open one before applying for APY.
• PAN Card: The subscriber should have a valid Permanent Account Number (PAN) or provide a declaration in Form 60 if a PAN is not available.
• No Pension Account: Individuals who are already receiving any kind of pension or have a Swavalamban account are not eligible for the Atal Pension Yojana Scheme

Charges to Maintain the APY Scheme Account

There are several charges associated with maintaining an APY account, categorized into two types: one-time charges and recurring charges.

1. One-time Charges

• Account opening charge: Rs. 15/- charged once during account opening.
• Downgrade/Upgrade charge: Rs. 25/- levied if you change your chosen pension amount.

2. Recurring Charges

• Annual maintenance charge: Rs. 20/- deducted yearly from your APY account.
• Investment maintenance fees:  For an electronic segment of AUM: 0.0075% per annum. For a physical segment of AUM: 0.05% per annum.

Tax Benefits for APY Scheme 

There are some tax benefits to avail of the Atal Pension Yojana Scheme such as the Deduction under Section 80CCD(1B), Section 80CCD(1), etc.

Contributions

• Deduction under Section 80CCD(1B): You can claim a deduction of up to 10% of your gross total income or Rs. 1.5 lakh per year, whichever is lower, for contributions made to your APY account. This deduction falls under the same section as Tier 1 NPS contributions.

• Additional deduction for low-income earners: Under Section 80CCD(1), an additional deduction of up to Rs. 50,000 per year is available for individuals with a gross total income below Rs. 10 lakh. However, this deduction cannot be claimed in addition to the 10% deduction mentioned above.

Pension Payouts

• Partial tax exemption: Up to 40% of the lump sum received at the time of exit from the scheme after attaining the age of 60 is exempt from income tax.

• Annuity taxation: The monthly pension received after maturity is taxed as per your applicable income tax slab.

Penalties for Late Payments of APY Scheme

Here are the penalties for late payments of APY Scheme that you should look at in 2024:

Atal Pension Yojana Customer Care Number

Currently, there is no centralized toll-free helpline number for Atal Pension Yojana. APY accounts can be opened in different banks across India. Therefore, for any issues related to your APY account, you should contact the bank where you have opened your pension account. However, for APY assistance, you can reach out to the following toll-free numbers:

Customer Support Toll-Free Numbers:

• CRA (Central Recordkeeping Agency): 1800-222-080

• NPS Helpdesk: 1800-110-708

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Conclusion

In conclusion, the Atal Pension Yojana is an initiative by the Indian government to promote financial security for the elderly population. By providing a guaranteed pension to those who have contributed during their working years, the scheme aims to alleviate poverty and ensure a comfortable retirement for all citizens. The scheme's low entry age and affordable contributions make it accessible to a wide range of individuals, particularly those in the unorganized sector.