Atal Pension Yojana (APY)
APY was launched on 9th May, 2015 by the Prime Minister. APY is open to all saving bank/post office saving bank account holders in the age group of 18 to 40 years and the contributions differ, based on pension amount chosen. Subscribers would receive the guaranteed minimum monthly pension of Rs. 1,000 or Rs. 2,000 or Rs. 3,000 or Rs. 4,000 or Rs. 5,000 at the age of 60 years. Under APY, the monthly pension would be available to the subscriber, and after him to his spouse and after their death, the pension corpus, as accumulated at age 60 of the subscriber, would be returned to the nominee of the subscriber. The minimum pension would be guaranteed by the Government, i.e., if the accumulated corpus based on contributions earns a lower than estimated return on investment and is inadequate to provide the minimum guaranteed pension, the Central Government would fund such inadequacy. Alternatively, if the returns on investment are higher, the subscribers would get enhanced pensionary benefits.
In the event of pre-mature death of the subscriber, Government has decided to give an option to the spouse of the subscriber to continue contributing to APY account of the subscriber, for the remaining vesting period, till the original subscriber would have attained the age of 60 years. The spouse of the subscriber shall be entitled to receive the same pension amount as that of the subscriber until the death of the spouse. After the death of both the subscriber and the spouse, the nominee of the subscriber shall be entitled to receive the pension wealth, as accumulated till age 60 of the subscriber. As on 31st March, 2017, a total of 48.54 lakh subscribers have been enrolled under APY with a total pension wealth of Rs. 1,756.48 crore.
Atal Pension Yojana
“As our young population ages, it is also going to be pension-less. Encouraged by the success of the Pradhan Mantri Jan Dhan Yojana, I propose to work towards creating a universal social security system for all Indians that will ensure that no Indian citizen will have to worry about illness, accidents or penury in old age”, said Finance Minister Jaitley in his 2015-16 Union Budget speech. In keeping with this ideal, a National Pension Scheme, the Atal Pension Yojana was effected from May 2015. The scheme intends to bring pension benefits to people of the unorganised sector so that they can enjoy social security with a minimum contribution per month. People who work in the private sector or are employed in occupations that do not give them the benefit of pension can apply for this scheme. They can opt for a fixed pension of INR 1,000 or 2,000 or 3,000 or 4,000 or 5,000 on attaining the age of 60. The amount of contribution and the individual’s age will determine the pension. Upon the contributor’s death, the spouse of the contributor can claim the pension and after the spouse’s death, the nominee will be returned the corpus accrued. The amount collected under the scheme is to be managed by Pension Funds Regulatory Authority of India (PFRDA) as per the investment pattern specified by the Government of India. Individual applicants will have no choice of pension funds or investment allocation
Benefits of Atal Pension Yojana (APY)
The Atal Pension Scheme will bring security to ageing Indians while at the same time promote a culture of savings and investment among the lower and lower-middle-class sections of society. One of the greatest benefits of the scheme may be enjoyed by the poorer sections of society. The government of India decided to contribute 50% of the user’s contribution or INR 1,000 a year (whichever is lower) for a period of five years. This contribution, however, was enjoyed only by those who were not income taxpayers and those who joined the scheme before 31 December 2015.
Tax Benefits:
Also, as per the circular released by the Income Tax department, contributions to the Atal Pension Yojana (APY) are now eligible for the same tax benefits as the National Pension System (NPS). The tax benefits include an additional deduction of up to Rs 50,000 under section 80CCD(1) of the Income Tax Act.
Other Benefits:
One gets a guaranteed monthly pension ranging from Rs. 1000-5000. In case of the death of the subscriber, the pension goes to his/her spouse. In case both dies, then the entire corpus is given to the nominees.
Exit Policy:
The subscribers to the scheme are even allowed to have a premature exit but only in exceptional circumstances, like in the case of terminal disease or death.
Who is Eligible for Atal Pension Yojana?
The Atal Pension Yojana (APY) is open to all Indians between the age of 18 and 40. This allows an individual to contribute for at least 20 years before reaping the benefits of the scheme. Any bank account holder who is not a member of any statutory social security scheme can avail of the scheme. All existing members of the government’s ‘Swavalamban Yojana NPS Lite’ will automatically be migrated to the Atal Pension Yojana. It will now replace the Swavalamban scheme, which did not gain much popularity across the country.
How to Enroll for Atal Pension Scheme?
To sign up for the Atal Pension Yojana, an account holder must fill in an authorisation form and submit it to his/her bank. The form will require complete details including account number, spouse and nominee details, and authorisation for auto debit of the contribution amount. Account holders signing up for the scheme need to ensure that sufficient balance is maintained in the account every month, failing to do so will attract a monthly fine of –
- INR 1 for a monthly contribution up to INR 100
- INR 2 for a monthly contribution between INR 101 and INR 500
- INR 5 for a monthly contribution between INR 501 and INR 1,000
- INR 10 for a monthly contribution beyond INR 1,001
- If no payment is made towards the scheme
- for six months, the holder’s account will be frozen
- for 12 months, the holder’s account will be deactivated
- for 24 months, the holder’s account will be closed For those who does not have a bank account: A person needs to open a bank account first by submitting the KYC document and Aadhar card. He/she is also required to submit the APY proposal form. Exiting the scheme: Under ordinary circumstances, an account holder who has enrolled for the Atal Pension Yojana will not be able to exit the scheme before the age of 60. Exiting the scheme is only possible in special circumstances such as in the event of the death of the beneficiary.APY Application Form
The application form can be downloaded from http://www.jansuraksha.gov.in/FORMS-APY.aspx. The forms are available in different languages – English, Hindi, Gujarati, Bangla, Kannada, Odia, Marathi, Telugu and Tamil. Indicative Contribution for Various Pension Options (in INR)
| Entry Age | Years of Contribution | Monthly Pension INR 1000 | Monthly Pension INR 2000 | Monthly Pension INR 3000 | Monthly Pension INR 4000 | Monthly Pension INR 5000 |
| 18 | 42 | 42 | 84 | 126 | 168 | 210 |
| 19 | 41 | 46 | 92 | 138 | 183 | 228 |
| 20 | 40 | 50 | 100 | 150 | 198 | 248 |
| 21 | 39 | 54 | 108 | 162 | 215 | 269 |
| 22 | 38 | 59 | 117 | 177 | 234 | 292 |
| 23 | 37 | 64 | 127 | 192 | 254 | 318 |
| 24 | 36 | 70 | 139 | 208 | 277 | 346 |
| 25 | 35 | 76 | 151 | 226 | 301 | 376 |
| 26 | 34 | 82 | 164 | 246 | 327 | 409 |
| 27 | 33 | 90 | 178 | 268 | 356 | 446 |
| 28 | 32 | 97 | 194 | 292 | 388 | 485 |
| 29 | 31 | 106 | 212 | 318 | 423 | 529 |
| 30 | 30 | 116 | 231 | 347 | 462 | 577 |
| 31 | 29 | 126 | 252 | 379 | 504 | 630 |
| 32 | 28 | 138 | 276 | 414 | 551 | 689 |
| 33 | 27 | 151 | 302 | 453 | 602 | 752 |
| 34 | 26 | 165 | 330 | 495 | 659 | 824 |
| 35 | 25 | 181 | 362 | 543 | 722 | 902 |
| 36 | 24 | 198 | 396 | 594 | 792 | 990 |
| 37 | 23 | 218 | 436 | 654 | 870 | 1,087 |
| 38 | 22 | 240 | 480 | 720 | 957 | 1,196 |
| 39 | 21 | 264 | 528 | 792 | 1,054 | 1,318 |
| 40 | 20 | 291 | 582 | 873 | 1,164 | 1,454 |
*Data from Atal Pension Yojna brochure
Launch Across the Country
The Atal Pension Scheme and the other insurance schemes were launched on 9 May 2015 simultaneously by Union and Chief Ministers. Prime Minister Narendra Modi launched the scheme from Kolkata.
|
Age of Joining
|
Years of Contribution
|
Indicative Monthly Contribution (in Rs.)
|
Monthly Pension to the subscribers and his spouse (in Rs.) |
Indicative Return of Corpus to the nominee of the subscribers (in Rs.) |
|
18
|
42
|
42
|
1000
|
1.7 Lakh
|
|
20
|
40
|
50
|
1000
|
1.7 Lakh
|
|
25
|
35
|
76
|
1000
|
1.7 Lakh
|
|
30
|
30
|
116
|
1000
|
1.7 Lakh
|
|
35
|
25
|
181
|
1000
|
1.7 Lakh
|
|
40
|
20
|
291
|
1000
|
1.7 Lakh
|
Table of contribution levels, for fixed monthly pension of Rs. 2,000 per month to subscribers and his spouse and return of corpus to nominees of subscribers and the contribution period under Atal Pension Yojana
|
Age of Joining
|
Years of Contribution
|
Indicative Monthly Contribution (in Rs.)
|
Monthly Pension to the subscribers and his spouse (in Rs.) |
Indicative Return of Corpus to the nominee of the subscribers (in Rs.) |
|
18
|
42
|
84
|
2000
|
3.4 Lakh
|
|
20
|
40
|
100
|
2000
|
3.4 Lakh
|
|
25
|
35
|
151
|
2000
|
3.4 Lakh
|
|
30
|
30
|
231
|
2000
|
3.4 Lakh
|
|
35
|
25
|
362
|
2000
|
3.4 Lakh
|
|
40
|
20
|
581
|
2000
|
3.4 Lakh
|
Table of contribution levels, for fixed monthly pension of Rs. 3,000 per month to subscribers and his spouse and return of corpus to nominees of subscribers and the contribution period under Atal Pension Yojana
|
Age of Joining
|
Years of Contribution
|
Indicative Monthly Contribution (in Rs.)
|
Monthly Pension to the subscribers and his spouse (in Rs.) |
Indicative Return of Corpus to the nominee of the subscribers (in Rs.) |
|
18
|
42
|
126
|
3000
|
5.1 Lakh
|
|
20
|
40
|
150
|
3000
|
5.1 Lakh
|
|
25
|
35
|
226
|
3000
|
5.1 Lakh
|
|
30
|
30
|
347
|
3000
|
5.1 Lakh
|
|
35
|
25
|
543
|
3000
|
5.1 Lakh
|
|
40
|
20
|
873
|
3000
|
5.1 Lakh
|
Table of contribution levels, for fixed monthly pension of Rs. 4,000 per month to subscribers and his spouse and return of corpus to nominees of subscribers and the contribution period under Atal Pension Yojana
|
Age of Joining
|
Years of Contribution
|
Indicative Monthly Contribution (in Rs.)
|
Monthly Pension to the subscribers and his spouse (in Rs.) |
Indicative Return of Corpus to the nominee of the subscribers (in Rs.) |
|
18
|
42
|
168
|
4000
|
6.8 Lakh
|
|
20
|
40
|
198
|
4000
|
6.8 Lakh
|
|
25
|
35
|
301
|
4000
|
6.8 Lakh
|
|
30
|
30
|
462
|
4000
|
6.8 Lakh
|
|
35
|
25
|
722
|
4000
|
6.8 Lakh
|
|
40
|
20
|
1164
|
4000
|
6.8 Lakh
|
Table of contribution levels, for fixed monthly pension of Rs. 5,000 per month to subscribers and his spouse and return of corpus to nominees of subscribers and the contribution period under Atal Pension Yojana
|
Age of Joining
|
Years of Contribution
|
Indicative Monthly Contribution (in Rs.)
|
Monthly Pension to the subscribers and his spouse (in Rs.) |
Indicative Return of Corpus to the nominee of the subscribers (in Rs.) |
|
18
|
42
|
210
|
5000
|
8.5 Lakh
|
|
20
|
40
|
248
|
5000
|
8.5 Lakh
|
|
25
|
35
|
367
|
5000
|
8.5 Lakh
|
|
30
|
30
|
577
|
5000
|
8.5 Lakh
|
|
35
|
25
|
902
|
5000
|
8.5 Lakh
|
|
40
|
20
|
1454
|
5000
|
8.5 Lakh
|
Recent Developments
- The government will extend the benefit of the APY via Post Offices all over the country so as to bring more people under its ambit. The implementation of the scheme through post offices is expected to be more helpful for the people in rural areas.
- In March 2016, the government amended the scheme’s provisions to give the subscriber’s spouse an option to continue contributing to the account for the balance period on the premature death of the subscriber.
- The Government released Rs 100 crore towards its co-contribution for Atal Pension Yojana (APY) in 2015-16 fiscal.
- Also, as per the circular released by the Income Tax department, contributions to the Atal Pension Yojana (APY) are now eligible for the same tax benefits as the National Pension System (NPS). The tax benefits include an additional deduction of Rs 50,000 under section 80CCD(1) introduced in the year 2015 Budget.
- To increase the outreach of Atal Pension Yojana (APY) among the prospective subscribers in the country, The Pension Fund Regulatory and Development Authority of India (PFRDA), on August 19, 2016, has integrated the APY module with the bank’s core banking system, allowing enrollments to happen through people’s saving accounts. It will not only make the process convenient but a whole lot faster and hassle-free. The customers would not be required to submit physical forms to the bank from now on, and a web-based APY subscriber registration mode has been allowed for customers with net-banking accounts.
APY Subscribers Are Now More than 1.24 Crore
As new 27 lakh subscribers join the Atal Pension Yojana in the FY 2018-19, the total number of subscribers to the scheme has crossed the mark of 1.24 crore. In the scheme enrolment, the top contributors are people from the states of Karnataka, Maharashtra, Andhra Pradesh, Bihar, and Uttar Pradesh. As of 27 October 2018, the APY subscribers from Karnataka are 9.15 lakh, from Andhra Pradesh are 11.28 lakh, from Maharashtra are 10 lakh, from Bihar are 11.16 lakh, and from Uttar Pradesh are 17.90 lakh.
How to track ‘Atal Pension Yojana’ account
A few months back, the finance ministry had also launched a facility whereby subscribers can view online their statement of the transaction. This would benefit more than 45 lakh subscribers of the Atal Pension Yojana. The subscriber can view his or her account statement by providing the savings bank account number and the Permanent Retirement Account Number. APY account holder can check their transaction details here:
For more Information on Atal Pension Yojana click here