Atal Pension Yojana benefits the retirees of the unorganised worker class, providing them with a secured pension after the age of 60. Launched on 9th May 2015, the scheme allows individuals to make monthly contributions throughout their working years to ensure financial stability in their retirement years.
Let's explore the benefits of this retirement plan and how it provides long-term financial security for a worry-free retirement.
What is the Atal Pension Scheme?
Atal Pension Yojana is a government scheme focusing on unorganised sector workers. Under this scheme, subscribers are guaranteed to get a minimum pension of ₹1,000, ₹2,000, ₹3,000, ₹4,000 or ₹5,000 per month. The amount will be given at the age of 60 as per their pension contribution.
Any Indian citizen can enrol in the monthly pension scheme after they meet eligibility requirements.
- Their age should be between 18 to 40 years.
- They must have a savings bank account or post office savings bank account.
- Individuals must have a mobile number.
- The bank account must be linked to the Aadhar.
- A subscriber can open only one APY account.
- Minor cannot open APY account.
- Income Taxpayers are not eligible to invest in APY with effect from 1st October 2022.
Click here for detailed eligibility criteria and documentation requirements.
Atal Pension Yojana Scheme Benefits
Support in old age
The major benefit this scheme provides is financial security to subscribers in their old age. The pension amount is crucial for people who cannot work and earn a livelihood in old age, as it helps them live a dignified life.
Benefits unorganised sector
The scheme benefits are focused on providing pension protection to the unorganised worker’s sector, which is generally not covered by the other schemes.
Nominee inclusion
Nominee inclusion under the Atal Pension Yojana ensures financial protection for your family. In the event of the subscriber's death, based on the beneficiary details provided, the nominee will receive the pension or accumulated contributions.
Atal Pension Yojana death benefits
In the event of the subscriber’s death after the age of 60, the pension amount will be available to the spouse. But if both the subscriber and their spouse pass away, the accumulated wealth till the age of 60 would be returned to the nominee.
However, if the subscriber dies before 60 years, the spouse has the option to continue contributing to the pension scheme and will receive a pension amount. If not, the corpus amount will be returned to the spouse/ nominee.
Atal Pension Yojana benefits after retirement
The prime benefit of the scheme is the pension amount that subscribers will receive after 60 years of age. The amount serves as their regular income that supports their post-retirement life.
Tax benefits
Individuals can avail of tax exemptions under Section 80CCD of the Income Tax Act of 1961. The maximum exemption allowed under this section is 10% of the total gross income in a particular year up to ₹1.5 lakh. Additionally, exemption under Section 80CCD(1B) is allowed up to ₹50,000.
Also Read: Know the difference between Tier 1 and Tier 2 in NPS
FAQs
Can I open a pension account under APY without having a savings account?
No, every Atal Pension Yojana subscriber must have a savings bank account or post office savings bank account.
Is it compulsory to declare a nominee when applying for the Atal Pension Scheme?
Yes, it is mandatory to provide nominee details while applying for the Atal Pension Yojana.
Is it possible to have more than one pension account under this scheme?
No, subscribers can only have one APY account; multiple accounts are not allowed.
Is there a way to apply for APY online?
Yes, subscribers can apply to the APY scheme online through Axis Bank for an easy and hassle-free process.
What are the age criteria for joining this scheme?
The age criteria for the APY scheme is 18- 40 years.
Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.
