The Atal Pension Yojana (APY), a government-backed pension scheme launched in 2015, aims to provide financial security during old age to workers in the unorganised sector.
The Atal Pension Yojana (APY), a government-backed pension scheme launched in 2015, aims to provide financial security during old age to workers in the unorganised sector. By offering guaranteed minimum pensions, the scheme ensures that every Indian citizen can plan for a stable future post-retirement.
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Eligibility for Atal Pension Yojana (APY)
To ensure wide access to the scheme, the government has set straightforward eligibility criteria:
Age Group: Individuals must be aged between 18 to 40 years.
Bank Account: Applicants must have a savings bank account in India.
Non-Taxpayer: The scheme is primarily aimed at individuals who do not fall under the taxpayer category.
Aadhaar: Applicants should have a valid Aadhaar number linked to their bank account.
Existing Pension Scheme: The individual must not be part of any other statutory social security schemes like the Employees’ Provident Fund (EPF) or Employees’ State Insurance (ESI).
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Features of Atal Pension Yojana
Guaranteed Pension: Depending on the contribution, subscribers will receive a guaranteed monthly pension of Rs 1,000 to Rs 5,000 after the age of 60.
Government Contribution: The Government of India co-contributes 50 per cent of the total contribution or Rs 1,000 per year (whichever is lower) for eligible subscribers for five years.
Flexible Contributions: The contribution amount varies based on the chosen pension amount and the age at which the individual joins the scheme. Contributions are auto-debited from the savings account.
Nomination Facility: The scheme allows for the nomination of a beneficiary, usually the spouse, who will receive the pension in the event of the subscriber’s death.
Exit Before 60: Early exit is only permitted in cases of death or terminal illness. The spouse can continue to contribute or exit the scheme as per their preference.
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Benefits of Atal Pension Yojana
Pension Security: APY provides a stable income post-retirement, ensuring financial independence in old age.
Risk-Free: Since the pension amount is government-guaranteed, there’s no risk of market fluctuations impacting the returns.
Government Support: Low-income earners benefit from government contributions, which make APY an attractive option for those in the unorganised sector.
Nominal Contribution: The contribution required is small, especially for those who join early, making it affordable even for low-income groups.
Tax Benefits: Contributions to APY are eligible for tax deductions under Section 80CCD (1B) of the Income Tax Act, which allows a deduction of up to Rs 50,000.
How to Open an Atal Pension Yojana Account
Opening an APY account is simple and can be done online or by visiting a bank branch:
Step 1: Visit your bank’s branch or log in to your net banking account.
Step 2: Fill the APY registration form and provide basic information such as name, date of birth, Aadhaar, and mobile number.
Step 3: Select your pension amount (Rs 1,000 to Rs 5,000) based on your financial goals and age.
Step 4: Submit the form and link your savings bank account for auto-debit of contributions.
Step 5: Upon verification, the bank will provide an APY account number, and you will receive a confirmation on your registered mobile number.
Conclusion
Atal Pension Yojana is a thoughtful initiative for individuals in the unorganised sector to secure a pension and ensure financial independence post-retirement. With minimal contributions and government support, APY makes retirement planning accessible to the masses, ensuring the elderly do not have to rely solely on their family or struggle with financial uncertainty.
