What is Atal Pension Yojana?
Atal Pension Yojana (APY) is a Government run pension scheme open to all citizens of India mainly focusing on the unorganised sector. APY is administered by the Pension Fund Regulatory and Development Authority (PFRDA) under the National Pension System (NPS). Under this scheme, a minimum monthly pension between Rs.1000 to Rs.5000 is guaranteed for the beneficiaries.
Subscribers can opt for a monthly pension which could be 1,000, 2,000, 3,000, 4,000 or 5,000 rupees, which will start after the age of 60 years. The amount of pension one receives is directly related to the age at which the individual has joined APY and the monthly amount which is contributed.
Objective of the Scheme
Atal Pension Yojana is focused upon:
- Unorganized sector such as House Help, Gardeners, Delivery Boys etc.
- Ensure a sense of security and protect the citizens from accidents, illness, diseases
Eligibility Criteria for Atal Pension Yojna
All Indian citizens between the age of 18 to 40 years can enroll for pension after the age of 60 under the APY.
- The individual applying for the benefit of the scheme must contribute for at least 20 years
- The individual enrolled under Swavalamban Yojana will be migrated under Atal Pension Scheme automatically
Atal Pension Yojana Details
The following are some of the key features of the Atal Pension Yojana:
- Available for subscription to all Indians in the age group of 18 years to 40 years.
- Pension will start after the subscriber attains the age of 60 years.
- Pension amount can be selected as monthly Rs. 1000, Rs. 2000, Rs. 3000, Rs. 4000 and Rs. 5000. Contribution amounts will be calculated accordingly.
- Bank account is mandatory for the scheme and deposit amount is auto-debited from the account periodically.
- Contributions made into the Atal Pension Yojana are eligible for tax deduction under Section 80CCD.
How to Open an Atal Pension Yojana Account?
- Fill up and submit the APY registration form, at your local bank branch
- Provide your bank account number, Aadhar No. and Mobile number
- Your first contribution amount will be deducted from your linked bank account at the time of account opening.
- Your bank will issue acknowledgment No./PRAN No. to you.
- Subsequent contributions will be automatically deducted from your bank account.
How to Download APY Form
The account opening form for Atal Pension Yojana can easily be obtained offline from your nearby bank branch that participates in the scheme. However, the APY application form can also be downloaded for free from various websites such as the Pension Fund Regulatory and Development Authority (PFRDA) Official Website. Alternatively, the Atal Pension Yojana subscription form is also available online on various banking websites that include most major banks (private as well as public-sector ones) operating in India.
How to Fill Application Form?
The Atal Pension Yojana application form comprises the following key fields that need to be filled out correctly prior to submission of the application form:
- Section 1 – Bank details like Bank Account Number, Bank Name, and Bank Branch information.
- Section 2 – Personal Details such as Name of the applicant, Date of Birth, Email ID, Marital Status, Name of the spouse, Name of the nominee, nominee’s relationship with the subscriber, Age and Mobile Number of the subscriber’s. Aadhar Card Details of spouse and nominee.
- Section 3 – Pension Details to be provided like Pension Amount selected – Rs. 1000/Rs. 2000/ Rs. 3000/Rs. 4000/Rs. 5000
- The Monthly Contribution Amount will be calculated and filled out by the bank.
- Additional details required if the nominee is a minor include –, Date of Birth, Guardian’s Name and answers to key information like ‘Is the minor a beneficiary of other statutory social security schemes?’ And ‘Is the minor an income tax payer?’
If the APY applicant does not have an account with the bank they are applying through, they have to open a bank account with a scheduled bank with a core banking platform. Once the bank account is up and running, the remaining steps are the same as existing Bank Account holders.
Once filled out completely, the application form must be signed by the subscriber and submitted to the bank. The APY form also contains an Acknowledgement Section which reads – “Acknowledgement – Subscriber Registration for Atal Pension Yojana (APY)”. This will be filled out and signed/stamped by a Bank Official once the application is processed.
Can you Change Your APY Pension Payout?
- The subscriber can change the pension amount during the period the contribution is made. This can be done once in a year, in the month of April
- In case of downgrade of pension, the differential amount will be refunded to the contributor through direct credit to a bank account that is registered under APY.
- Upgrading or downgrading of the APY account is chargeable. An upfront fee of Rs.25 will be charged by the bank.
- Long term commitment of the subscriber is imperative since the subscription will be made over at least a period of 20 years (in case subscriber enters scheme at age of 40 years).
How to Contribute to Atal Pension Yojana
Contributions to Atal Pension Yojana are made by setting up an auto-debit instruction with your bank. This is the only way to contribute. If you do not keep sufficient account balance for the auto debit, a penalty will be charged as follows:
- If contribution per month is up to Rs.100, then penalty of Re.1 will be charged
- If contribution per month is between Rs.101 to 500, then penalty will be Rs.2
- If contribution per month is between Rs.501 to 1000, then penal charges will be Rs.5
- If the contribution per month is over Rs.1,001, the penal charges will be Rs.10
What Happens If You Fail to Contribute to APY?
If you subscribe to APY and yet fail to make regular contributions to the pension scheme due to failure of auto-debit instruction, the following occurs:
- Atal Pension Yojana account is frozen after 6 months of non-payment
- Deactivation of the APY account after 12 months of non-payment
- Automatic closure of the APY account after 24 months of non-payment
- The Bank can recover the due amount any time until the last day of that month. Funds can be recovered as and when there are funds in the APY-linked bank account and at any point of time during the month.
Note: To prevent late payment, periodical mobile alerts are sent to APY subscribers by Banks.
Fees, Charges Pertaining to Maintenance of APY Account
|Point of Presence||Registration of APY SubscriberRecurring Charges Per Annum||Rs.120 to 150, which depends on the number of subscribersRs. 100 per subscriber|
|Central Recordkeeping Agencies||APY Account opening charges Account maintenance charges||Rs. 15 per account|
Rs. 40 per account per annum
|Custodian||Investment maintenance Fee (per annum)||0.0075% for electronic & 0.05% for physical segment of AUM*|
|Pension Fund Managers||Investment maintenance Fee (per annum)||0.0102% of AUM|
How is APY Money Invested?
The investment details matter less in the APY than NPS because you get a guaranteed pension. The investment return only matters if the returns generated exceed the guaranteed pension amount. In such cases, a higher pension amount or higher return of corpus for nominees will be available on death of the subscriber.
- Government Securities – Min. 45% and max. 50%
- Debt Securities and term deposits of banks – Min.35% and max. 45%
- Equity and related instrument – Min. 5% and max. 15%
- Asset Backed Securities etc. – Max. 5 %
- Money Market Instruments – Max. 5%
Tax Benefits for APY Subscribers
Atal Pension Yojana is a government notified pension scheme hence it offers tax exemption benefits up to the Rs. 1.5 lakh cumulative annual limit under Section 80C of the Income Tax Act, 1961. Additionally, APY also qualifies for an additional benefit of up to Rs. 50,000 annually under the relatively newer Section 80CCD (1) of the Income Tax Act, 1961. This additional benefit of up to Rs. 50,000 annually is the same that applies to National Pension System contributions which is over and above the Rs. 1.5 lakh annual tax exemption benefit offered u/s 80C.
APY Account Closure and Exit
Closure of APY account and exit from the scheme is only allowed in case of terminal illness or death. Upon the death of the subscriber, the APY corpus in its entirety is paid to the nominee as per details provided in the APY account opening form.
Co-contribution by the Government is available in this scheme to make APY more popular among workers in the unorganized sector. The co-contribution by the government would be 50% of the amount contributed by the beneficiary per year or Rs.1,000 per year, whichever is lower will be added by the Government. The Government will participate in this co-contribution for five years i.e., from Financial Year 2015-16 to 2019-20. Subscribers enjoying the co-contribution cannot be members of any statutory social security scheme and should not be paying income tax (meaning their income should be below the income tax threshold).
The monthly contribution depends upon the amount of pension you want to receive upon retirement and also the age at which you start contributing. The following table tells you how much you need to contribute per annum based on your age and pension plan.
|Age of Entry||Years of Contribution||Monthly Pension of Rs.1000. Indicative Return of Corpus of Rs.1.70lakh||Monthly Pension of Rs.2000. Indicative Return of Corpus of Rs.3.40lakh||Monthly Pension of Rs.3000. Indicative Return of Corpus of Rs.5.10lakh||Monthly Pension of Rs.4000. Indicative Return of Corpus of Rs.6.80lakh||Monthly Pension of Rs.5000. Indicative Return of Corpus of Rs.8.50lakh|
Features & Benefits of Atal Pension Yojana
The main features of the APY scheme are mentioned below:
- The Indian Government guarantees the minimum pension that will be paid to the individual after retirement.
- Under Section 80CCD, individuals are eligible for Atal Pension Yojana tax benefits for the contributions made towards the scheme.
- All bank account holders are eligible to join the APY scheme.
- Individuals will start receiving pension once they reach the age of 60.
- Private sector employees who are not provided any pension benefits are also allowed to apply for Atal Pension Yojana scheme.
- You have an option of receiving a fixed pension of Rs.1,000, Rs.2,000, Rs.3,000, Rs.4,000, or Rs.5,000 once you reach 60 years of age.
- In case of your demise during the scheme, your spouse can either claim the contributions or complete the duration of the scheme.
Customer Support Toll Free Number
At present there is no centralised Atal Pension Yojana Support toll free number as an APY account can be opened at various leading banks across India. Hence the primary point of contact with respect to APY account-related issues would be the specific bank where you have opened your pension account. Alternatively, in case of Atal Pension Yojana Support you can call the following toll free numbers:
CRA (Central Recordkeeping Agency) – 1800-222-080
NPS Helpdesk – 1800-110-708