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Introduction:

The Atal Pension Yojana (APY) is a government-backed pension scheme in India, launched by the Government of India in 2015, aimed primarily at providing social security to workers in the unorganized sector. It is administered by the Pension Fund Regulatory and Development Authority (PFRDA) under the National Pension System (NPS) architecture.

Objective of APY

The main objective of APY is to provide a fixed minimum pension after the age of 60 to individuals who are not covered by formal pension schemes. This helps them to live a dignified life in their old age, especially when they no longer earn an active income.

Eligibility Criteria

• Age Limit: Individuals aged 18 to 40 years are eligible to join the APY.
• Bank Account: A savings bank account or post office savings account is mandatory.
• Citizenship: The applicant must be a citizen of India.
• Aadhaar Card: While not mandatory at enrollment, it is recommended to facilitate KYC (Know Your Customer) and avoid future issues.

Pension Benefits

Under APY, subscribers can receive a fixed monthly pension after the age of 60 years. The pension amount can be chosen at the time of enrollment:

• ₹1,000
• ₹2,000
• ₹3,000
• ₹4,000
• ₹5,000

The pension amount depends on the contribution made, the age of joining, and the duration of contribution.

For example, a person joining at the age of 18 will have to contribute less monthly compared to someone joining at 35 to receive the same pension amount.

Contribution Details

• Contributions are auto-debited monthly from the subscriber’s account.
• Contribution varies from ₹42 to ₹1,454 per month, depending on age and the pension amount chosen.
• Subscribers can also make quarterly or half-yearly contributions.

Government Co-contribution

For those who enrolled between June 1, 2015, and March 31, 2016, and who were not income taxpayers or not covered under any statutory social security scheme, the government contributed 50% of the subscriber’s contribution or ₹1,000 annually (whichever is lower) for 5 years.

This incentive is no longer available for new subscribers but was a great initial boost to promote enrollment.

Tax Benefits

Contributions under APY qualify for tax benefits under Section 80CCD of the Income Tax Act. This helps subscribers save on taxes while securing their retirement.

Withdrawal and Exit

• Upon reaching 60 years of age, the subscriber can start receiving a guaranteed monthly pension.
• The pension is paid to the subscriber till death, and thereafter to the spouse. Upon the demise of both, the entire pension corpus is returned to the nominee.
• Premature exit is allowed only in case of terminal illness or death. In case of death before 60, the spouse can either claim the corpus or continue the scheme.

How to Enroll

1. Visit your bank or post office branch where you have a savings account.
2. Fill in the APY registration form.
3. Provide Aadhaar and mobile number.
4. Select the pension amount and mode of payment.
5. Authorize the bank to auto-debit contributions.

Key Features

• Low risk and guaranteed returns.
• Aimed at the economically weaker sections.
• Backed by the Government of India, ensuring payout certainty.
• Flexible contribution options.

Conclusion

The Atal Pension Yojana is a powerful initiative to ensure financial security for workers in the unorganized sector during their old age. With guaranteed pensions, low contribution requirements, and government support, APY is a vital step towards inclusive social welfare and financial inclusion. It encourages people to think about retirement planning early in life and provides peace of mind for the future