With the effective introduction of the Pradhan Mantri Jan Dhan Yojana and the continued availability of banking benefits through the opening of a zero-balance account, our honorable Finance Minister Mr. Arun Jaitley enacted and passed a National Pension Scheme (NPS) known as Atal Pension Yojana (“APY”) in the Union Budget of 2015-16.
Introduction to Atal Pension Yojana
- Introduction to Atal Pension Yojana
- Eligibility for the Atal Pension Yojana
- Atal Pension Yojana Advantages
- Important facts to know about Atal Pension Yojana
- Benefits of Atal Pension Yojana 2021
- How to Apply for the Atal Pension Yojana (APY)?
- How to fill out a form of Atal Pension Yojana
- Step 1: Fill the form
- Step 2: Banking details
- Step 3: Personal information
- Step 4: Details of pensions
- Step 5: Declaration and authorization
- Step 6: To be filled by Bank
- Procedure for Withdrawing from the Atal Pension Yojana
- Atal Pension Yojana Penalty Charges
- Migration of Existing Subscribers of Swavalamban Scheme to APY Scheme
- APY Subscriber Tax Benefits
- APY Account Closure and Logout
Atal Pension Yojana is a pension scheme that focuses on the informal sector such as domestic workers, farmers, boys who are brought in, etc. The Yojana substitutes the preceding Swavalamban Yojana which was not well received. The purpose of this program is to ensure that no Indian citizen should worry about illness, accidents, or illness in old age, providing a sense of security. Employees of private companies or employees working with a non-profit organization can also apply for the scheme. There is a choice to get a fixed pension of Rs 1000 to Rs 5000 when you reach the age of 60. The pension will be determined by the age of the person and the amount of the contribution.
The spouse of the donor may claim a pension from the donor’s death and on the death of both the participant and his or her spouse, the nominee will be given a collected corpus. However, if the donor dies before the age of 60, the spouse is also allowed to leave the scheme to seek corpus or continue the plan for the duration of the balance. According to the investment policy set by the Indian government, the amount collected under this scheme will be managed by the Pension Funds Regulatory Authority of India (“PFRDA”).
The Government will also make a joint contribution of 50% of the total contribution. 1000 per year, whichever is low, for all entitled subscribers who join among June 2015 and December 2015 for a period of 5 years that is, for the 2015-16 to 2019-20 financial years. Registrants must not be part of any other legal social security schemes (Example: Employee’s provident fund), or they must not pay income tax, to receive co-operative Government participation.
Eligibility for the Atal Pension Yojana
The following are the criteria for the Atal Pension Yojana:
- You must be a resident of India.
- Also, you must be between the ages of 18 and 40 to participate.
- You must have a working phone number.
- A valid bank account number must be connected to your Aadhaar number.
- All ‘Know Your Customer’ information must be sent.
- You do not already have an APY account.
Atal Pension Yojana Advantages
The following are the main features of the APY scheme:
- The Indian government ensures that a person will receive a minimum pension after retirement.
- Individuals who make contributions to the Atal Pension Yojana are eligible for tax benefits under Section 80CCD.
- The APY scheme is open to anyone with a bank account.
- When people reach the age of 60, they will begin earning a pension.
- Employees in the private sector who do not earn any pension benefits are also eligible to apply for the Atal Pension Yojana scheme.
- When you reach the age of 60, you can choose between a fixed pension of Rs.1,000, Rs.2,000, Rs.3,000, Rs.4,000, or Rs.5,000.
- If you die when the scheme is still operating, your spouse has the option of requesting the contributions or continuing the scheme.
Important facts to know about Atal Pension Yojana
As you will be contributing from time to time, prices will be automatically deducted from your account. You need to make sure you have enough balance in your account before each withdrawal.
- You can increase the amount you pay at your discretion. You need to visit your bank and talk to your manager and make the necessary changes.
- If you fail to pay, a fine will be charged. A fine of Rs. 1 per month for a donation of Rs each. 100 or part of that.
- Moreover, if you fail to pay for six months, your account will be suspended and if the error persists for 12 months, the account will be closed and the balance will be paid to the subscriber.
- Early withdrawal is unpleasant. In cases such as death or chronic illness, the registrant, or nominee will be refunded the full amount.
- If you close the scheme before the age of 60 for any other reason, only your donation and interest will be refunded. You will not be eligible for a corporate social grant or interest earned on that amount.
Benefits of Atal Pension Yojana 2021
- This system is only available to Indian people.
- Only after completing the age of 60 can the Central Government have a monthly pension ranging from Rs 1000 to Rs 5000 under the Atal Pension Yojana.
- The pension sum under the Atal Pension Yojana will be determined by the beneficiaries’ contribution and age.
- Similar to the PF account, the government will make a one-time contribution to this pension plan.
- If you are 18 years old and want a monthly pension of 1000 rupees, you must pay a premium of 210 rupees per month for 42 years.
- People over the age of 40 would have to pay a premium ranging from Rs 297 to Rs 1, 454. Then and only then will they be able to take advantage of APY 2021.
How to Apply for the Atal Pension Yojana (APY)?
To take advantage of the scheme’s benefits, follow the measures mentioned below:
- The APY scheme applies to all nationalized banks. Individuals can open an APY account at these banks.
- The account opening forms can also be found on the bank’s websites. Individuals can obtain the application form by downloading it.
- English, Telugu, Tamil, Odia, Marathi, Kannada, Gujarati, and Bangla are all present in the application form.
- The bank application form must be completed and submitted.
- It is important to have a valid mobile phone number.
- A photocopy of your Aadhaar card is needed.
How to fill out a form of Atal Pension Yojana
Once you have purchased the Atal Pension Yojana Scheme form, completing it is easy.
Step 1: Fill the form
You must submit the form to the Branch Manager. You can get the name of your Branch Manager by calling or visiting the bank. Enter your bank and branch name.
Step 2: Banking details
Fill in the form with BLOCK characters. First, you need to provide your banking details. Enter your bank account number, bank name, and bank branch. This field is mandatory.
Step 3: Personal information
- Tick the active box that indicates whether you are “Shri”, “Smt” or “Kumari”. Tick “Shri” if you are a male applicant. Tick “Smt” if you are a woman who has applied for marriage. Tick “Kumari” if you are a woman applying for one.
- Married applicants must enter the name of their spouse.
- Enter your full name, date of birth, and age.
- Provide your mobile number, email address, and Aadhaar number.
- After that, you can choose someone and say their relationship with you. The nominee will receive your donation in the event of your death.
- If the nominee is young, you must provide their date of birth and the name of the guardian.
- You must also state whether the nominee has other official social security schemes and whether they are taxpayers.
Step 4: Details of pensions
You can contribute to your pension, between Rs.1,000 and Rs.5,000 with options on the form such as Rs.1,000, Rs.2,000, Rs.3,000, Rs.4,000, and Rs.5,000. The box below, entitled “Monthly Allowance (Monthly)” will be left blank as it will be completed by the bank after calculating your monthly pension payment.
The number will be based on your entry age. For example, with a pension of Rs.2,000, if your entry age is 25, you will have to pay Rs.151 per month.
You need to fill in the date and location. You can sign the document or put a sixth sense. By signing the document, you declare that you meet the eligibility criteria for Atal Pension Yojana and that you have read and understood the terms and conditions of the program. You declare that all information you have entered is as accurate as you know it. Should a change in the information provided be made, you will contact the bank immediately. You also agree that you do not have an account under the NPS (National Pension System). You will be held liable for any false or misleading information that is intentionally provided.
Step 6: To be filled by Bank
The final section of the Atal Pension Scheme form, entitled “Acknowledgment – Subscriber Registration for Atal Pension Scheme (APY)” will be completed by the bank. You must leave this box blank. It is a method approved by the bank that they will register for the Atal Pension Yojana Scheme. After submitting the form, the bank agent will complete it.
Procedure for Withdrawing from the Atal Pension Yojana
- The Atal Pension Yojana withdrawal procedure has been marginally changed, as it previously did not allow exiting before reaching the age of 60.
- If you reach the age of 60, you can leave this program and receive a full annualization of your pension. You’ll need to go to the bank to fill out an application for your pension.
- Only extraordinary conditions, such as terminal illness or death, cause you to leave the scheme before hitting the age of 60. Your partner would earn your pension if you die before reaching the age of 60. If both you and your spouse pass away, the pension will be paid to your nominated beneficiary.
Atal Pension Yojana Penalty Charges
In the circumstance of late payments, the following (APY) interest charges will be assessed each month:
- If you contribute up to Rs.100 per month, you will be paid a penalty of Rs.1.
- If your monthly contribution is between Rs.101 and Rs.500, you will be paid a penalty of Rs.2.
- For donations between Rs.500 and Rs.1,000 per month, a penalty of Rs.5 will be paid.
- If you pay more than Rs.1,001 per month, you will be paid a tax of Rs.10.
The APY penalty payments would be a fixed sum depending on the amount of the pension.
If payments are halted, the following points apply:
- The account will be frozen if no payments are made for six months.
- If no payments are made for 12 months, the account will be deactivated.
- If no payments are made for 24 months, the APY account will be locked.
Migration of Existing Subscribers of Swavalamban Scheme to APY Scheme
All current Swavalamban Scheme participants will be automatically transferred to APY, but the government’s co-contribution benefit will be limited to 5 years. This means that if a subscriber received a one-year co-contribution under the Swavalamban System, they would only be liable for a four-year co-contribution benefit. If they plan to continue to work under this arrangement, the government will provide co-funding until 2016-17.
Subscribers over the age of 40 who do not wish to proceed with a Swavalamban Scheme can either withdraw the entire amount as a lump sum or continue to be eligible for annuities until they reach the age of 60.
APY Subscriber Tax Benefits
Atal Pension Yojana is a government-funded pension scheme that is why it offers tax-free benefits up to Rs. An annual collection limit of 1.5 lakh under Section 80C of the Income Tax Act, 1961. In addition, APY is also eligible for additional profits of up to Rs. 50,000 annually under Section 80CCD (1) of the new Income Tax Act, 1961. This additional benefit amounts to Rs. 50,000 annually the same applies to National Pension contributions in excess of Rs. 1.5 lakh income tax payable per annum.
APY Account Closure and Logout
APY account closure and exit scheme are only allowed in the event of chronic illness or death. In the event of the death of the registrant, the entire APY corpus is paid to the nominee according to the information provided on the APY account opening form.
Government partnerships are available in this program to make APY more popular among employees in the informal sector. The co-operative contribution made by the government will be 50% of the annual contribution of the beneficiary or in dollars. 1000 per year, any lower will be added by the Government. The government will participate in this partnership for five years, that is, from the 2015-16 Financial Year to 2019-20. Subscribers who enjoy corporate participation cannot become members of any legal system of social security and should not have to pay income tax (meaning their income must be below the income tax limit).
PFRDA has launched the Atal Pension Yojana App to make it easier for subscribers to access their APY accounts. You can check your APY account balance, when the next donation is due, APY account information, APY transactions list, and more by downloading the app. The PFRDA’s Atal Pension Yojana App is free to download from the Android App Store.