Atal Pension Yojana (APY) - Scheme Detail Explained

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By CMV360 Editorial StaffUpdated On: 10-Feb-2023 12:26 PM

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Englishहिन्दीमराठीਪੰਜਾਬੀதமிழ்తెలుగు

ByCMV360 Editorial Staff |Updated On: 10-Feb-2023 12:26 PM

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Atal Pension Yojana (APY) is a government-backed pension scheme launched by the Prime Minister of India, Narendra Modi, in 2015. The scheme is administered by the Pension Fund Regulatory and Development Authority (PFRDA) and is implemented through participating banks and post offices.

The main objective of APY is to provide a guaranteed pension to individuals in the unorganized sector, such as small farmers, small traders, and micro-businesses, during their old age. The scheme is open to all citizens of India between the age of 18 and 40 years, who have a savings bank account with a participating bank or post office.

To enroll in the scheme, individuals need to contribute a fixed amount to their pension account every month, starting from a minimum of Rs. 55 per month and going up to Rs. 9,000 per month. The amount of pension received by the individual will depend on the amount contributed and the age of the individual at the time of joining the scheme. The pension amount ranges from Rs. 1,000 to Rs. 5,000 per month.

How to apply for the Atal Pension Yojana (APY)

To apply for the Atal Pension Yojana (APY), you will need to follow these steps:

• Identify an eligible bank branch: Visit any bank branch that is part of the APY scheme and ask for the application form.

• Fill in the application form: Fill in the application form with your personal details such as name, address, age, and bank account number.

• Provide required documents: Submit a photocopy of your identity and age proof, such as a PAN card, Aadhaar card, passport, or voter ID card.

• Choose your pension amount: Decide on the monthly pension amount that you wish to receive after your retirement. The pension amount can be between Rs. 1000 to Rs. 5000.

• Make the initial contribution: Make an initial contribution to open your APY account. The minimum initial contribution varies based on the age of the subscriber.

• Enroll for automatic debit: Enroll for automatic debit of the monthly contributions from your bank account.

• Complete the registration process: Submit the completed application form and the required documents to the bank. The bank will then process your application and open your APY account.

Note: The process of registration and the required documents may vary slightly depending on the bank you choose to apply through. It is always best to check with the bank for the most current information.

Instructions for Completing the Atal Pension Yojana Application Form

The Atal Pension Yojana form is straightforward to fill out, as long as you have all the necessary information ready. Here are the steps to complete the form:

Step 1: Address the form

The first step is to address the form to the Branch Manager of your bank. You can find out the name of your Branch Manager by calling or visiting the bank. Fill in your bank's name and branch in the appropriate fields.

Step 2: Provide Bank Details

Fill in the form in BLOCK letters. The first information you need to provide is your bank details. Enter your bank account number, bank name, and branch. This field is mandatory.

Step 3: Personal Information

Select the appropriate box that indicates whether you are "Shri", "Smt", or "Kumari." If you are a male applicant, tick the "Shri" box. If you are a married female applicant, tick the "Smt" box. If you are a single female applicant, tick the "Kumari" box.

If you are married, enter your spouse's name. Provide your full name, date of birth, and age. Give your mobile number, email address, and Aadhaar number. You can also nominate someone and state their relationship to you. A nominee will receive your contribution in case of your death. If the nominee is a minor, provide their date of birth and guardian's name. Also, mention if the nominee has any other statutory social security schemes and if they are income taxpayers.

Step 4: Pension Details

Select the contribution amount you wish to make, between Rs.1,000 and Rs.5,000. You can choose from options such as Rs.1,000, Rs.2,000, Rs.3,000, Rs.4,000, and Rs.5,000. The box titled "Contribution Amount (Monthly)" will be left blank as the bank will calculate the amount you need to pay monthly to receive the pension.

The calculation will be based on your entry age. For example, for a pension of Rs.2,000, if your entry age is 25 years, you will have to pay Rs.151 per month.

Step 5: Declaration and Authorization

Fill in the date and place, and either sign the document or put a thumb impression. By signing the document, you declare that you meet the Atal Pension Yojana eligibility criteria, have read and understood the terms and conditions of the scheme, that all the information you have provided is correct to the best of your knowledge, and that you will contact the bank immediately if any changes need to be made. You also declare that you do not have an account under the National Pension System. You will be held liable for any false or incorrect information provided knowingly.

Step 6: Bank-Filled Section

The last section of the Atal Pension Scheme form, titled "Acknowledgement - Subscriber Registration for Atal Pension Yojana (APY)" is to be filled out by the bank. It serves as an acknowledgement from the bank that they will subscribe to the Atal Pension Yojana Scheme for you. Once you submit the form, the bank agent will fill it out.

Eligibility for Atal Pension Yojana

To be eligible for the Atal Pension Yojana, you must:

• Be an Indian citizen
• Be between the ages of 18 and 40 years old
• Have an active mobile number
• Have a bank account that is linked to your Aadhaar number
• Provide all necessary "Know Your Customer" information
• Not already have an existing APY account

Monthly Contributions for Atal Pension Yojana

The amount of monthly pension you wish to receive and your age when you start the scheme are the main factors that determine your monthly contributions to the Atal Pension Yojana. The table below illustrates the required monthly contributions and the number of years they must be made in order to receive a pension of Rs.1,000, Rs.2,000, Rs.3,000, Rs.4,000, or Rs.5,000.

Atal Pension Yojana key features and benefits

The Atal Pension Yojana (APY) offers several features and benefits to eligible individuals, including:

• Government guarantee of minimum pension upon retirement
• Tax benefits under Section 80 CCD for contributions made to the scheme
• Eligibility for all bank account holders
• Pension payments beginning at age 60
• Availability for private sector employees without pension benefits
• Option to choose a fixed pension amount of Rs.1,000, Rs.2,000, Rs.3,000, Rs.4,000, or Rs.5,000 upon reaching age 60
• Spousal options for handling contributions in the event of the subscriber's death during the scheme.

The scheme also provides the option of auto-debit facility, which allows the contributions to be automatically debited from the savings bank account on a monthly basis. This feature ensures regular and timely contributions to the pension account.

Atal Pension Yojana Investment Plan

The investment plan for the Atal Pension Yojana (APY) is primarily focused on government securities, term deposits of banks and debt securities, and a small proportion in equity and equity-related instruments, Asset Backed Securities and Money Market Instruments. The quantum of investment in these categories is as follows:

• Government Securities: 45% to 50%

• Term deposits of banks and debt securities: 35% to 45%

• Equity and equity-related instruments: 5% to 15%

• Asset Backed Securities and so on: Up to 5%

• Money Market Instruments: Up to 5%

Withdrawal Procedure of Atal Pension Yojana

The withdrawal procedure for the Atal Pension Yojana has been updated to allow for early exit under certain circumstances. Below are the two withdrawal options -

1. Once you reach 60 years of age, you can exit the scheme and receive a full annuitization of your pension amount. This can be done by visiting your bank and applying for your pension

2. If you are facing exceptional circumstances such as terminal illness or death, you may be able to withdraw from the scheme before reaching 60 years old. In the event of your death before reaching 60, your spouse may receive your pension. If both you and your spouse have passed away, the pension will be paid to your nominee.

Penalty Charges

The penalties for late payments under the Atal Pension Yojana (APY) include:

• A penalty of Re.1 will be imposed for contributions up to Rs.100 per month.

• A penalty of Rs.2 will be imposed for contributions between Rs.101 and Rs.500 per month.

• A penalty of Rs.5 will be imposed for contributions between Rs.500 and Rs.1,000 per month.

• A penalty of Rs.10 will be imposed for contributions above Rs.1,001 per month.

If payments are not made for a certain duration, the following actions will be taken:

• The account will be frozen if no payments are made for 6 months.

• The account will be deactivated if no payments are made for 12 months.

• The account will be closed if no payments are made for 24 months.

The scheme has been designed to provide a financially secure future to the individuals from the unorganized sector, who otherwise would not have access to any pension schemes. It also aims to inculcate the habit of saving for old age among citizens and provide them with a regular income during their retirement years.

In conclusion, Atal Pension Yojana (APY) is a government-backed pension scheme that aims to provide a guaranteed pension to individuals from the unorganized sector during their old age. The scheme is open to all citizens of India between the age of 18 and 40 years and offers a range of pension amounts based on the contribution and age of the individual. It is a great initiative towards providing a financially secure future for citizens of India who are engaged in the unorganized sector.

Frequently Asked Questions on the Atal Pension Yojana

Q1: What is the procedure to open an Atal Pension Yojana account?

To open an APY account, fill out the subscription form and provide your Aadhaar number and a valid mobile number. Submit the form to the bank and set up auto-debits from your bank account, making sure to have enough funds to make regular contributions.

Q2: Is it mandatory to provide the Aadhaar number when registering for the scheme?

While it is not mandatory to provide the Aadhaar number when subscribing, it is the primary KYC document required by banks to identify beneficiaries, nominees, and the subscriber's spouse.

Q3: Can I open an Atal Pension Yojana account without a savings account?

No, it is mandatory to have a savings bank account when applying for the scheme.

Q4: How is the due date for monthly contributions decided?

The due date is based on the first deposit date.

Q5: Is it mandatory to provide a nomination when joining the Atal Pension Yojana scheme?

Yes, nominations are mandatory, and nominee details, along with the spouse's details, must be provided while applying for the scheme. Aadhaar details must also be provided for the spouse and nominee.

Q6: Can a subscriber open multiple Atal Pension Yojana accounts?

A single subscriber is only allowed to open one APY account, which will remain unique to them.

Q7: Can I join the Atal Pension Yojana scheme without an Aadhaar number?

An Aadhaar number is not required when opening an APY account, but Aadhaar details are necessary for enrolling beneficiaries, spouses, and identifying nominees.

Q8: Are EPF subscribers eligible to enroll for the Atal Pension Yojana scheme?

Yes, Employees Provident Fund subscribers are eligible to enroll for the APY scheme.

Q9: Are there any tax benefits for Atal Pension Yojana account holders?

No, there are no tax deductions available for the monthly contributions made towards the Atal Pension Yojana scheme.

Q10: Can I change my monthly contribution amounts?

Yes, monthly contributions can be increased or decreased once a year, during the month of April, based on your personal needs.

Q11: How can I check my account balance?

You will receive regular statements regarding your account status and available balance. Additionally, you can also receive instant information through an SMS alert on your registered mobile number.

Q12: If I move to a different city, can I still make monthly contributions to my account?

Yes, you can continue making monthly contributions to your account without interruption, as the amount is automatically debited from your account.

Q13: What happens if I don't have enough funds in my account to make my monthly contribution?

If there is insufficient balance in your account to make your monthly contribution, a penalty will be imposed.

Q14: What happens to my account if I become an NRI?

Only Indian citizens are eligible to open an Atal Pension Yojana account. If you become an NRI, your account will be closed and the accrued contribution amount will be given to you, treated as a voluntary exit before the age of 60.