The Atal Pension Yojana (APY), a government-backed pension scheme which is an excellent opportunity for Indian residents, particularly those working in the informal sector, to prepare for a financially secure retirement. APY was launched in 2015 and has grown significantly having over 60 million customers as of 2023-24.
Here’s a comprehensive guide to understanding APY and how can you benefit from it:
Eligibility
- Indian citizen with Age between 18 and 40 years
- People with a valid Aadhaar card linked to their bank account
- An Active phone number
- Should have not already receiving benefits under another social security scheme
- Must Commit to contribute for at least 20 years
Benefits of APY
- Guaranteed Monthly Pension: Upon reaching 60 years of age, you would get a set monthly pension of Rs. 1,000–5,000.
- Tax Benefits: Contributions can be tax-deductible under Section 80CCD of the Income Tax Act.
- Benefits for Family: Spouses and nominees can receive the subscriber’s pension or cumulative contributions in the event of their death. If both the subscriber and spouse die, the nominee receives the cumulative sum.
- Flexible Contributions: Adjust your contributions annually to fit your financial position.
- Early and Exit option: APY offers an early exit option for subscribers experiencing terminal illness or death, in addition to its retirement planning purpose.
How to Apply for APY
- Obtain the application form: Download the form from your bank’s website, the PFRDA website, or from a participating bank branch.
- Filling out the form: By providing essential information like your name, address, bank account and other necessary information required.
- Submission of the application: After filling out the form, the next step is to submit it. With documents like photocopy of aadhaar card and other important documents required.
- After the application is processes the bank will send you a confirmation message.
Contribution Amount
Your targeted pension amount and the age at which you joined the programme determine how much you contribute each month. Based on these variables, the bank will determine the monthly contribution.