Did you know that the government of India offers a guaranteed minimum pension to individuals in the unorganized sectors? The Atal Pension Yojana (APY) is a pension scheme that gives citizens above 60 years of age access to a basic pension.
What is Atal Pension Yojana?
The Atal Pension Yojana, or AYP, is a government-run initiative that empowers individuals who have toiled in the unorganized sector. Recognizing the financial needs of this strata, the scheme was introduced to extend financial support to individuals
within the eligibility criteria. This scheme is managed by the Pension Fund Regulatory and Development Authority (PFRDA) under the National Pension System. It guarantees an income on retirement for individuals who have contributed to their pension account.
Every beneficiary is eligible for a minimum pension of Rs.1000—Rs.5000, which depends on two factors.
- The age at which the pensioner had joined the scheme
- The amount contributed by the pensioner each month before they turned 60 years old
What is the objective of the Atal Pension Yojana scheme?
– The main focus was to support the unorganized sector during their retirement years. This includes individuals who work in sectors like house help, security guards, delivery boys, gardeners, laborers, etc.
– The government recognized the need for economic safety to meet their basic needs like food and health.
– This pension amount helps citizens during critical times such as illnesses, accidents, or unexpected emergencies.
Atal Pension Yojana Eligibility Criteria?
In order to be eligible for the scheme, the individual must be
- An Indian citizen
- Between 18 to 40 years of age during registration
- The person must contribute for at least 20 years to get benefits at retirement
- Those registered under Swavalamban Yojana will be automatically brought into Atal Pension Yojana (APS) (auto-debit)
Things to Know About the Atal Pension Yojana Scheme?
- Ideal for people working in the unorganized sector, looking for basic economic stability upon retirement
- Only Indian citizens between 18-40 years of age are eligible for this scheme.
- Pension is applicable once the individual turns 60 years of age
- Pension amount could be Rs. 1000, Rs. 2000, Rs. 3000, Rs. 4000 and Rs. 5000 monthly
- Individuals must have an individual bank account from which monthly contributions will be deducted each month.
- Contributions under the Atal Pension Yojana will be tax-exempt under Income Tax Section 80CCD
How do you Open an Atal Pension Yojana account?
Opening the Atal pension Yojana scheme is simple .
- You can either try the Atal pension yojana online form or go to your local bank branch
- Fill in basic details like account number, Adhaar number, and mobile number
- Once that form is filled out and the bank processes the application, the individual’s account in Atal Pension Yojana will be opened
- First contribution shall be deducted at the time of account opening
- The bank will issue a PRAN number
- All subsequent transactions shall be auto-debited from your bank account
How To Download the APY Form?
The Atal Pension Yojana online application feature is available. You can download the form from any bank website or from the official website of the Pension Fund Regulatory and Development Authority (PFRDA).
How to Contribute to Atal Pension Yojana?
– A monthly auto-deduction of the desired amount can be done from your bank account, this will require your authorization.
– Monthly, quarterly, or half-year contributions with standing instructions can be set along with the amount
– The monthly date for contribution deduction needs to be set during the first contribution. All the contributions will follow on the same date of each month.
– Ensure you have sufficient funds in your account during the said date of each contribution
– Duly update your KYC to identify the nominee, spouse, etc., in order to avoid future disputes.
Fees and Charges Related to the Maintenance of APY Account
| Mediator | action | Relevant Charges |
| Location | APY Subscriber Registration | ₹ 120 to ₹ 150, depending on the number of customers |
| Recurring Charges per year | Rs 100 per customer | |
| Central Recording Agencies | APY Account Opening Charges | ₹ 15 per account |
| Account maintenance charges | ₹ 40 per account per year | |
| Patron | Investment Maintenance Charges (per year) | 0.0075% for electronic and 0.005% for physical segment of AUM |
| Pension Fund Manager | Investment Maintenance Charges (per year) | 0.0102% of AUM |
Tax Benefits For APY Subscribers
The Atal Pension Yojana benefits in tax savings. Because it is a government pension scheme, contribution of up to 1.5 lakh per annum or tax exemption under section 80C of the Income Tax Act, 1961. In addition, a benefit of up to Rs. 50,000 per annum under the new section 80CCD (1) of the Income Tax Act, 1961. Rs. 50,000 per annum is the same as applicable to National Pension System contributions up to Rs. 1.5 lakh annual tax exemption benefit offered u/s 80C.
Conclusion
The Atal Pension Yojana is a government-backed initiative designed to offer economic stability to retired citizens from the unorganized sector. Tailored to meet the challenging needs of non-taxpayers, pensioners are eligible for a guaranteed monthly income of Rs.1000-Rs.5000 upon retirement. Secure your future today with the Atal Pension Yojana and prepare for a restful retirement life.
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