Atal Pension Yojana – Tax Benefits, Interest Rates and Eligibility Criteria

A national pension scheme known as Atal Pension Yojana was announced in the Union Budget of 2015-16 – after the success of Pradhan Mantri Jan Dhan Yojana. Former Finance Minister Mr Arun Jaitley had introduced this scheme with the aim to provide a stable income to the citizens of India after the age of 60.

Atal Pension Yojana (APY) – What is this Scheme?

Atal Pension Yojana is the replacement of the previous Swavalamban Yojana that did not work well.

The Atal Pension Yojana scheme gives you a choice to get a fixed pension every month, be it Rs 1,000, Rs 2,000 or Rs 3,000, once the citizen attains an age of 60. However, the pension is determined on the basis of age and the contribution amount of the individual. In case the contributor dies, his or her spouse can claim the pension amount. And if both the contributor and the spouse die, the nominee will be eligible to get the collected corpus. But if a contributor dies before the age of 60, the spouse has the option to either discontinue the scheme and claim the corpus or continue it for the remaining time period.

According to the investment pattern made by the government, the accumulated amount will be regulated by the PFRDA or Pension Funds Regulatory Authority of India.

Atal Pension Yojana (APY) – Objective

The scheme has been majorly designed to provide a sense of security to senior citizens of India. Its main objectives include:

• Provision of security against any mishappening such as diseases, illnesses or accidents.
• It is mainly aimed at those working in the private sector or in an organization not providing pension benefits.

Atal Pension Yojana – Features & Benefits

The key Atal Pension Yojana benefits include:

• Under Section 80CCD, a person would be eligible for the scheme’s tax benefits for making contributions.
• Any bank account holder can apply for the APY scheme.
• The pension will be received after the age of 60.
• Those working in the private sector with no pension benefits can apply for the APY scheme.
• You can choose to receive a fixed pension of Rs 1,000, Rs 2,000, Rs 3,000, Rs 4,000 or Rs 5,000 after the age of 60.
• If the contributor dies, the spouse has the option to either continue the scheme or discontinue it.

Atal Pension Yojana Eligibility Criteria

The eligibility criteria to apply for Atal Pension Yojana includes:

• One must be an Indian citizen
• One must be between the age of 18 and 40
• One should make a minimum contribution of 20 years
• One must have a bank account linked with Aadhaar
• One must have a valid contact number

Note: Those who are already subscribed under Swavalamban Yojana will be automatically eligible for Atal Pension Yojana. 

Atal Pension Yojana (APY) – Documents Required

Not many documents are required to apply for Atal Pension Yojana. These are the documents required:

• Duly filled application form
• Photocopy of Aadhaar Card

Atal Pension Yojana Penalty Charges / Terms of Penalty

Below are the penalty charges to be levied monthly – in case there is any delayed payment:

• If the contribution is up to Rs 100 per month, a penalty of Rs 1 will be levied.
• If the contribution is above Rs 100 and up to Rs 500 per month, a penalty of Rs 2 will be levied.
• If the contribution is between Rs 500 and Rs 1,000, a penalty of Rs 5 will be levied.
• If the contribution is above Rs 1,001 per month, a penalty of Rs 10 will be levied.

The penalty charges under Atal Pension Yojana will be fixed depending on the pension amount.     

Check the below-mentioned conditions in case the payments are not being made:

• The account will be frozen in case no payment is made for a duration of 6 months.
• In case no payment is made for a duration of 12 months, the account will be deactivated.
• In case no payment is made for a duration of 24 months, the account will be closed.

Atal Pension Yojana Withdrawal Procedure

Since initially subscribers were not allowed to exit the scheme before the age of 60, there have been slight changes made in the withdrawal procedure of Atal Pension Yojana:

• In case you have turned 60, you can exit or discontinue the scheme with the complete pension amount. You need to visit the bank to apply for the pension.
• Exiting or discontinuing before the age of 60 is permitted under exceptional circumstances such as death or terminal illness. If the individual dies before the age of 60, his or her spouse will receive the amount of pension. And in case both individuals die, the nominee will receive the pension amount.

Atal Pension Yojana (APY) – Process to Apply

Below are the steps you need to follow to apply for Atal Pension Yojana:

• You can visit any of the nationalized banks to apply for Atal Pension Yojana since all authorized banks offer this scheme.
• In case you are looking for the Atal Pension Yojana online process, the application forms are available on the official websites of banks as well. You can download it from there.
• The form is available in various languages, including English, Gujarati, Tamil, Odia Telugu, Kannada, Marathi and Bangla.
• Duly fill out the application form and submit it at the bank.
• Provide a valid number in the form.
• Submit a photocopy of your Aadhaar Card along with the form.

You will receive a confirmation message once your application is approved. 

How to Download & Fill Atal Pension Yojana Form?

Use any of these methods to get the opening form for Atal Pension Yojana:

• Visit a nearby branch of any participant bank and collect the form.
• Go to the official portal of the participant banks, download it and take a printout of the form.
• Visit the official portal of PFRDA or Pension Fund Regulatory and Development Authority and download the opening form for Atal Pension Yojana.

Atal Pension Yojana (APY) Contribution Chart (Age Wise)

Below is the Atal Pension Yojana chart comprising the monthly subscription.

Atal Pension Yojana Tax Benefits

Titled in honour of the former Prime Minister of India – Atal Bihari Vajpayee, Atal Pension Yojana offers tax benefits to citizens of India. The benefits include additional deductions of Rs 50,000 under section 80CCD (1) of the Income Tax Act. The savings earned from the APY scheme are tax-free. The objective of the scheme is to provide a steady pension to the citizens of India. However, it is essential for you to save from your monthly earnings and invest in the scheme so that you can avail the benefits of a pension. The pension amount depends on the amount you invest. 

Additionally, the scheme is introduced for citizens with meagre earnings, thus, it is obvious that the subscriber would be the one who does not need to pay tax. Therefore, these savings are exempted from tax.

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Atal Pension Yojana – Frequently Asked Questions (FAQs)