Atal Pension Yojana
‘Save today for better tomorrow’ you must have heard this line in school or college life. Some of you may have understood its real meaning. Life is so unpredictable. Atal Pension Yojana was launched by Modi government in 2015 Thus, to deal with such unpredictable life, saving is must.
The Government of India has come up with a scheme called ‘Atal Pension Yojana’. Atal Pension Yojana (APY) – a pension scheme that will support old age. Focus of APY scheme is encouraging people to save for their retirement. So, if you want to pass your old age well, then this scheme is for you.
Atal Pension Yojana was launched by Modi government in 2015. Aim of this pension scheme is to attract workers from unorganised sectors like maids, drivers, gardeners, etc. But before going through Atal Pension Yojana you must have some knowledge about pension. So, let’s go through some queries briefly.
What is Pension?
- Pension is a regular payment made by the state to people of or above the official retirement age and to some widows and disabled people. In simple words, some amount of income is kept in bank per month, so that you will be rewarded per monthly with this after your retirement.
Pension schemes are offered by government and companies.
Why do I need it?
- If you are young, then this might be your first question before going through any pension scheme that. “Why do I need pension?” When we are young, no matter how much work we do, we don’t get tired. As we move forward, we start growing old and the capacity of our work also decreases. The fixed payment thus ensured is made by pension schemes only.
There is freedom to choose right pension scheme. Which scheme you have to take depends on you.
Let’s go in details to understand Atal Pension Yojana (APY).
What is Atal Pension Yojana?
- Atal Pension Yojana (APY) is a pension scheme for Indian citizens who work in unorganised sectors. APY guarantees minimum pension of Rs. 1000/-, Rs. 2000/-, Rs. 3000/-, Rs. 4000/-, and Rs. 5000/- per month after the age of 60 years.
Who is eligible for Atal Pension Yojana?
- Atal Pension Yojana (APY) is applicable to all Indian citizen aged between 18-40 years.
- Must be a citizen of India
- Must be between the age of 18-40
- Active mobile number
- Valid bank account number linked with Aadhar card
- Should make contribution for a minimum 20 years
What is the benefit in joining APY scheme?
Atal Pension Yojana offers benefits to its subscribers. These benefits are given below:
- APY scheme guarantees pension of Rs. 1000/-, Rs. 2000/-, Rs. 3000/-, Rs. 4000/-, and Rs. 5000/- per month after the age of 60 years.
- Subscriber qualify for tax benefits under Section 80CCD (1) of the Income Tax Act, 1961.
- More flexible than other schemes with option to subscribe on a month, quarterly or half-yearly basis.
- Guaranteed benefits for spouse/nominee/next of kin as per applicable if subscriber passes away.
What is the procedure for opening APY account?
Filling form without any mistake is kind of difficult thing. So, we have come with simple easy steps for you which will help you. Follow given steps to open Atal Pension Yojana account:
- Visit local bank which you have a bank account.
- You have to provide bank account number, Aadhar number and mobile number.
- Some amount will be deducted just after opening APY account from your linked bank.
- Bank will issue acknowledgement number or PRAN number to you.
- After every month your contribution will be deducted automatically.
How to fill Atal Pension Yojana (APY) Application Form?
There are few things to remember before going to fill application. You must have your bank passbook, email ID and Aadhar card.
- Block 1: In this section you have to fill up bank details such as bank A/C number, bank name and bank branch.
- Block 2: Personal details ae required in this block. You have to fill up your full name, date of birth, email ID, mobile number, Aadhar number, name of spouse, nominee name and nominee’s relationship with the subscriber.
- Block 3: If in case nominee is minor, then provide date of birth, guardian’s name, whether he/she is beneficiary of other statutory social security schemes and whether he/she is income tax payer.
- Block 4: Tick monthly pension amount from giver Rs. 1000/-, Rs. 2000/-, Rs. 3000/-, Rs. 4000/-, and Rs. 5000/- per month.
If applicant does not have a bank account, then he/she must have to open bank account and then apply for Atal Pension Yojana (APY).
Tax benefits for Atal Pension Yojana (APY) subscribers:
According to Income tax department, benefits to the Atal Pension Yojana (APY) subscribers are same as the National Pension System (NPS).
Under Section 80CCD (1), investment in Atal Pension Yojana or NPS up to ₹ 1.5 lakh qualifies for income tax deduction. But remember that the total amount of deduction under sections 80C, 80CCC and 80CCD cannot exceed ₹ 1.5 lakh. In addition, an investment up to ₹ 50,000 in the Atal Pension Yojana or NPS is deductible from taxable income under Section 80CCD (1B) of the Income Tax Act, 1961.
Atal Pension Yojana (APY) Stop Process:
In Atal Pension Yojana (APY) you will get Rs. 1000/- minimum to Rs. 5000/– maximum after age of 60 years. But in case you want to close APY scheme before completion period, then you can stop process of APY. You have to fill up the Account Closure Form and submit it to bank. This ‘Voluntary Exit APY Withdrawal From’ is provided by respective bank or you can download it from NSDL website.
Frequently asked questions – Atal Pension Yojana:
If I don’t have Aadhar account, can I apply for Atal Pension Yojana?
- It is not mandatory to provide Aadhaar number for opening APY account. However, For enrolment, Aadhaar would be the primary KYC document for identification of beneficiaries, spouse and nominees to avoid pension rights and entitlement related disputes in the long-term.
Can I open APY account without saving bank account?
- No. You must have saving bank account to join APY.
What is the mode of contribution to the account?
- All the subscribers are to be remitted monthly through auto-debit facility from saving bank account.
How much should I invest in APY to get guaranteed pension of Rs. 1000?
|Age of Joining||Year of Contribution||Indicative Monthly Contribution|
How many APY account I can open?
- You can open only one APY account.
What will happen to existing subscribers in Swavalamban Yojana?
- All the registered subscribers under Swavalamban Yojana aged between 18-40 yrs will be automatically migrated to APY with an option to opt out. However, the benefit of five years of Government Co-contribution under APY would be available only to the extent availed by the Swavalamban subscriber already. This would imply that if, as a Swavalamban beneficiary, he has received the benefit of government Co Contribution of 1 year, then the Government co-contribution under APY would be available only for 4 years and so on. Existing Swavalamban beneficiaries opting out from the proposed APY will be given Government co-contribution till 2016-17, if eligible, and the NPS Swavalamban continued till such people attain the age of exit under that scheme.
- Other subscribers above 40 years who do not wish to continue may opt out of the scheme with lump sum withdrawal.
- Subscribers above 40 years may also opt to continue till the age of 60 years and eligible for annuities.
- The existing Swavalamban scheme may be automatically migrated to APY.
What happen if you fail to contribute to APY?
- Non-maintenance of required balance in the savings bank account for contribution on the specified date will be considered as default. Banks are required to collect additional
amount for delayed payments, such amount will vary from minimum Re 1 per month to Rs 10/- per month as shown below:
- Re. 1 per month for contribution up to Rs. 100 per month.
- Re. 2 per month for contribution up to Rs. 101 to 500/- per month.
- Re 5 per month for contribution between Rs 501/- to 1000/- per month.
- Rs 10 per month for contribution beyond Rs 1001/- per month.
Discontinuation of payments of contribution amount shall lead to following:
- After 6 months account will be frozen.
- After 12 months account will be deactivated.
- After 24 months account will be closed.
Subscriber should ensure that the Bank account to be funded enough for auto debit of
contribution amount. The fixed amount of interest/penalty will remain as part of the pension corpus of the subscriber.
Which banks offer Atal Pension Yojana scheme?
- You can open APY account in any bank like SBI, HDFC, ICICI Axis or any other bank or post office.
Once a wise man said that ‘Youth should be a savings bank’. This scheme is not for only 30-40 years old people. But if you are between 18 -25 you can also join this scheme.