The Key Features Of The Atal Pension Yojana:

 

Atal Pension Yojana (APY) is an old age income security scheme for all the savings account holder between age group 18-40. The scheme also address the longevity risks among the workers in unorganized sector and encourages the workers to voluntarily save for their retirement.

Focus of APY:

The scheme is mainly targeted at unorganized sector workers.

Eligibility

Age of joining and contribution period:

The minimum age of joining APY is 18 years and maximum age is 40 years. The age of exit and start of pension would be 60 years. Therefore, minimum period of contribution by the subscriber under APY would be 20 years or more.

All bank account holders under the eligible category may join APY with auto debit facility to accounts.

Exclusions

Tax Payers will not be eligible to Join APY from 1 oct, 2022.

If a subscriber of the plan who enrolled on or after October 1, 2022, is later discovered to have paid income taxes on or before the date of application, the APY account will be terminated, and the member will be granted the total amount of pension wealth accrued up to that point, per the order.

Members of statutory social security scheme are not eligible under this scheme.

Statutory social security scheme:

  • Employees’ Provident Fund and Miscellaneous Provision Act, 1952.
  • The Coal Mines Provident Fund and Miscellaneous Provision Act, 1948.
  • Assam Tea Plantation Provident Fund and Miscellaneous Provision, 1955.
  • Seamens’ Provident Fund Act, 1966.
  • Jammu Kashmir Employees’ Provident Fund and Miscellaneous Provision Act, 1961.
  • Any other statutory social security scheme.

Benefits

Upon exit on attaining 60 years

The subscriber shall receive the following three benefits on attaining the age of 60:

(i) Guaranteed minimum pension amount: Each subscriber under APY shall receive a guaranteed minimum pension of Rs. 1000 per month or Rs. 2000 per month or Rs. 3000 per month or Rs. 4000 per month or Rs. 5000 per month, after the age of 60 years until death.

(ii) Guaranteed minimum pension amount to the spouse: After the subscriber’s demise, 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.

(iii) Return of the pension wealth to the nominee of the subscriber: After the demise 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 years of the subscriber.

Contributions to the Atal Pension Yojana (APY) is eligible for tax benefits similar to the National Pension System (NPS) under section 80CCD(1)

Voluntary exit (Exit before 60 Years of age):

The subscriber shall only be refunded the contributions made by him to APY along with the net actual accrued income earned on his contributions (after deducting the account maintenance charges).

However, in case of subscribers who joined the scheme before 31st March 2016 and received Government Co-Contribution shall not receive the Government co-contribution and the accrued income earned on the same, if opted for Voluntary exit before 60 years.

For death before 60 years

Option 1: In case of death of the subscriber before 60 years, option will be available to the spouse of the subscriber to continue contribution in the APY account of the subscriber, which can be maintained in the spouse’s name, 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 the subscriber until death of the spouse. Such APY account and pension amount would be in addition to even if the spouse has his/her APY account and pension amount in own name.

Option 2: The entire accumulated corpus till date under APY will be returned to the spouse / nominee.