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What is Pradhan Mantri Atal Pension Yojana?
As stated on www.india.gov.in - Atal Pension Yojana (APY) refers to a pension scheme for citizens of India is focused on the unorganized sector workers. According to the APY, a guaranteed minimum pension of Rs. 1,000/- or 2,000/- or 3,000/- or 4,000 or 5,000/- per month will be given at the age of 60 years depending on the contributions by the subscribers. Any Citizen of India can join APY scheme.The APY is named after the ex-prime minister of India, Atal Bihari Vajpayee. It was launched on 9th May 2015 to help secure the post-retirement stage of the poor, under privileged, unorganized and backward sectors.
The scheme, which is open for all Indian citizens is monitored and administered by the Pension Funds Regulatory and Development Authority under the NPS or the National Pension System.The applicants of the scheme can opt for a monthly pension amount ranging between Rs. 1000 to Rs. 5000, which will be remitted to them at the age of 60. The amount of pension you get depends on the contribution you pay every month and the age at which you join the scheme.
Features of Pradhan Mantri Pension Yojana
- Every Indian citizen who is aged 18 or above and is below 40 years is eligible to apply for this scheme.
- To apply for the Atal Pension Yojana Scheme , it is mandatory for the applicants to have a savings bank account . If you do not have an account already, you must be willing to open one and the account should have an auto-debit facility so that the premium is debit automatically.
- Subscribers would receive the guaranteed minimum monthly pension of Rs. 1000 or Rs. 2000 or Rs. 3000 or Rs. 4000 or Rs. 5000 at the age of 60 years.
- If you apply for the APY or Atal Pension Yojana, you must have a mobile number, which must be registered with your bank.
- The APY is primarily designed for helping the members of the unorganised sector including the small trader, self-employed individuals, and daily wage earners, get the benefit of savings.
- To apply for the Atal pension plan you must not be paying income tax. This means that your annual income below the taxable bracket.
Benefits of Atal Pension Plan
As per the mandate of the government, the Atal Pension Plan provides a pension of Rs. 1000 to Rs.5000 to the beneficiary after he/she turns 60. If the appoint beneficiary dies before turning 60, the pension will be paid to the beneficiary’s spouse. In the event of the death of both the beneficiary and their spouse, the accumulated funds will be given to the nominee.
- Another significant Atal Pension yojana benefits is that the scheme is governed by the Fund Regulatory and Development Authority, which means that the scheme is mandated by the government body and is complete safe and secured.
- When you apply for the APY scheme, your monthly contribution amount will be determined by the pension by the amount you want each month, the age at which you apply for the scheme and begin the contribution. If you are unsure how much you can contribute to the scheme, you can use the atal pension yojana calculator to exactly determine the amount.
- The amount you contribute towards the scheme is tax-deductible under the section 80CCD of the Indian Income Tax Act.
FAQS - FREQUENTLY ASKED QUESTIONS
How much pension do we get in Atal Pension Yojana ?
The amount of pension you receive under Atal Pension Yojana (APY) depends on the contribution made by you and the age at which you start contributing. The minimum monthly pension guaranteed by the scheme ranges from Rs. 1,000 to Rs. 5,000 per month. The amount of pension you receive will be based on the contribution you have made and the prevailing interest rate at the time of maturity of the scheme.
Which scheme is better NPS or Atal Pension Yojana ?
The choice between NPS and APY depends on individual preferences and goals. If an individual wants flexibility in investment options and the potential for higher returns, then NPS may be a better option. However, if an individual is looking for a guaranteed pension amount, then APY may be a better choice. Here are a few differences between the two schemes:
Factors
NPS
APY
Meaning
The National Pension System is a defined-contribution pension system in India regulated by Pension Fund Regulatory and Development Authority
Atal Pension Yojana (APY) refers to a pension scheme for citizens of India is focused on the unorganized sector workers.
Age limit
Any individual between the age of 18-70 years can register themselves for NPS
Any individual between the age of 18-40 years can register themselves under the APY
Target audience
This scheme targets Salaried individuals
This scheme targets socially backwards people from the unorganized sector
Tax Benefit
This scheme does provide a tax benefit - a tax rebate of upto 2 Lakhs
This scheme does not provide any tax benefit
Eligibility
Indians as well as NRI's can opt of the NPS
Only Indians can opt of the APY
Who is not eligible for Atal pension ?
With effect from 1st October,2022, any citizen who is or has been an income-tax payer, shall not be eligible to join APY
Any person who is not in the age bracket of 18-40 years
A person who does not have a savings account.
A person who doesn’t have a valid mobile number
How to withdraw money from APY ?
Atal Pension Yojana (APY) subscribers can withdraw money from the scheme once they reach the age of 60, which is the minimum age of vesting. Here are the steps to withdraw money from APY:
Visit the bank where you hold your APY account or log in to your internet banking portal.
Submit a request for withdrawal of funds from the APY account.
The bank will verify the request and the eligibility criteria for withdrawal, such as the age of the subscriber.
After verification, the bank will start the process of transferring the accumulated pension wealth to the subscriber's bank account.
The subscriber will receive a lump sum amount, which is the total accumulated pension wealth over the years.
What is the age limit for APY ?
Any individual between the age of 18-40 years can register themselves under the APY. The age limit has been set to ensure that subscribers have a sufficient period of contribution to accumulate the required pension wealth before reaching the age of 60 years.
Can a housewife apply for Atal Pension Yojana ?
Yes, a housewife can apply for the Atal Pension Yojanaas long as she meets the eligibility.
Can Atal Pension Yojana be transferred from one bank to another ?
Yes, it is possible to transfer the Atal Pension Yojana (APY) account from one bank to another. The process of transferring the APY account involves filling up an APY-IPV form and submitting it to the bank where the subscriber wants to transfer the account. The form should be duly filled and signed by the subscriber, and it should contain the details of the existing APY account and the details of the new bank account where the subscriber wants to transfer the APY account.
After submitting the APY-IPV form, the subscriber's identity and address will be verified through the bank's Know Your Customer (KYC) process. Once the KYC process is completed, the existing APY account will be closed, and the accumulated corpus, along with the government co-contribution and the accrued income, will be transferred to the new APY account in the new bank.
What happens to Atal Pension Yojana after death? Can we exit from APY before 60 years ?
In the case of the subscriber's death after 60 years of age, the spouse receives the pension, and upon the death of both the subscriber and spouse, the nominee receives the accumulated wealth until the subscriber's age of 60.
As for exiting from APY before the age of 60, Voluntary exit is permitted, and the subscriber will be refunded only the contributions made, along with the net accrued income earned on the contributions, after deducting account maintenance charges. The government co-contribution and accrued income on the government co-contribution will not be refunded.
Can I open both PPF and APY ?
Yes, as both are totally different pension schemes with different objectives. If an individual wishes to he/she can open both.
How many accounts one can open in APY ?
As per the Government of India, only 1 account per person is allowed under APY.
The information contained herein is generic in nature and is meant for educational purposes only. Nothing here is to be construed as an investment or financial or taxation advice nor to be considered as an invitation or solicitation or advertisement for any financial product. Readers are advised to exercise discretion and should seek independent professional advice prior to making any investment decision in relation to any financial product. Aditya Birla Capital Group is not liable for any decision arising out of the use of this information.
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