Atal Pension Yojana

Posted by  Fintra Editor , June 9, 2018

Atal Pension Yojana

The Government of India launches something for the opportunity-deprived section of our society  – the Atal Pension Yojana. The pension plan aims to encourage the weaker section to opt for pensions that would benefit them in their old age. The Atal Pension Yojana can be taken by almost anyone, be it someone working in a private organization or by anyone who is self-employed.

Before we get into the details, Fintra provides you an explanation of a few basic terms related to the scheme : 

What is a Pension?

A pension is a fund in which a person adds a sum of money during his/her employment years and then uses them at the time of retirement to support their needs by receiving money in form of periodic payments.

What is the Atal Pension Yojana?

Under this pension scheme, one can start investing his/her money between 18 and 40 years to earn a fixed minimum amount starting from 1,000 Rs. to 5,000 Rs. after the age of 60 years depending upon the contribution amount and time.

Features of Atal Pension Yojana

How to invest in Atal Pension Yojana or APY?

Atal Pension Yojana (APY) is open to all Indian citizens between the ages group of 18-40 years of age. You just need to inculcate or link this scheme with a savings account of yours by filing an authorization form in a bank or a post office.

The form requires details of your account number, spouse and nominee details, and authorization for auto-debit of contribution amount. Account-holders signing up for the Atal Pension Yojana scheme need to ensure that enough balance is maintained in the account every month for auto-debit, or else a monthly fine will be charged.

What will be your monthly contribution and mode of payment?

Your monthly contribution depends upon the pension you want monthly and the age when you start contributing. Therefore, even if you join APY at 40 years of age you need to pay a premium for a minimum of 20 years to avail the pension.

The following Atal Pension Yojana Chart shows the amount to be paid monthly based on your plan and age.

Age of entry

Years of contribution

Pension of Rs 1000.

Pension of Rs 2000.

Pension of Rs 3000.

Pension of Rs 4000.

Pension of Rs 5000.

18

42

42

84

126

168

210

19

41

46

92

138

183

228

20

40

50

100

150

198

248

21

39

54

108

162

215

269

22

38

59

117

177

234

298

23

37

64

127

192

254

318

24

36

70

139

208

277

346

25

35

76

151

226

301

376

26

34

82

164

246

327

409

27

33

90

178

268

356

446

28

32

97

194

292

388

485

29

31

106

212

318

423

529

30

30

116

231

347

462

577

31

29

126

252

379

504

630

32

28

138

276

414

551

689

33

27

151

302

453

602

752

34

26

165

330

495

659

824

35

25

181

362

543

722

902

36

24

198

396

594

792

990

37

23

218

436

654

870

1087

38

22

240

480

720

957

1196

39

21

264

528

792

1054

1318

 

What will be the Government of India’s contribution to the scheme?

To encourage more people to join this scheme, the Government of India contributes a sum towards the Pension Scheme for a period of only 5 years i.e. from 2015-2020 only. This contribution will be done by the government only on accounts opened under the Atal Pension Yojana Scheme only between 1 June'15 and 31 Dec'15. Customers shouldn’t be income taxpayers and should not have been covered under any other Social Security Schemes.

The government will either be making 50% of the contribution of the subscriber’s monthly contribution or 1,000 Rs whichever is less. Moreover, first, the subscriber will have to pay the contribution then, the government will credit 50% of the monthly contribution made to the subscriber's account.

 

Restrictions on government contributions

Individuals who are registered under other social security schemes are not eligible for contributions. Subscription to any of the below mentioned would make an individual ineligible for the Atal Pension Yojana Scheme (APY):

  1. The Coal Mines Provident Fund and Miscellaneous Provision Act, 1948.
  2. Employees' Provident Fund & Miscellaneous Provision Act, 1952.
  3. Seamen’s' Provident Fund Act, 1966.
  4. Jammu Kashmir Employees' Provident Fund & Miscellaneous Provision Act, 1961.
  5. Assam Tea Plantation Provident Fund and Miscellaneous Provision, 1955.
  6. Other Statutory Social Security Schemes

 

In all, the Atal Pension Yojana Scheme is the most suitable for those whose earnings are a part of lower-income group people or for ones who don’t have fixed employment. It can also be subscribed by someone who doesn’t have a family member to look after in old age.

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