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What Is Atal Pension Yojana?

By Author: Neha Sharma
Total Articles: 243
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One of the main problems in India has always been the lack of a Government-backed pension scheme making pensions available to all strata of the society. However, the Atal Pension Yojana (APY) looks to change that.

What is the Atal Pension Yojana?

The Atal Pension Yojana is a Central Government sponsored affordable pension scheme. A scheme is a form of universal social security for all Indians, especially for the underprivileged. The nature of the Atal Pension Yojana is a defined benefit plan where contributions will lead to a defined pension per month after the subscriber reaches 60 years of age.

The pension under Atal Pension Yojana will be between Rs. 1,000 to Rs. 4,000 per month. This pension amount will depend on the contribution that each subscriber makes to the scheme. The input to the APY scheme depends on:

• The age of the subscriber
• The targeted monthly pension post retirement

The Government has released a contribution chart with differing contributions for pensions from Rs. 1,000 to Rs. 4,000. The inputs for each slab of pension increase with age. For example, the contribution for Rs. 2,000 pension at 28 years of age is Rs. 194 monthly, Rs. 578 quarterly and Rs. 1,145 half yearly. Similarly, the contribution to a premium of Rs. 5,000 per month at 22 years of age is Rs. 292 monthly, Rs. 870 quarterly and Rs. 1,723 half yearly.

The minimum age to enter the APY is 18 years and contributions can be made until the subscriber reaches 40 years of age. All bank account holders can join the APY by activating the auto debit facility.

The APY account can be opened at the bank branch where the individual's savings account is maintained. Information about the scheme and auto-debit will be given via mobile. It can also be opened online.

Benefits of APY:

The APY is a scheme primarily based for the unorganised sector to receive fixed monthly pensions after reaching 60 years of age. As such, it provides a source of fixed monthly income to them.

To make the APY more attractive, contributions made to the scheme get an income tax deduction under Section 80CCD.

One of the Atal Pension Yojana benefits is that the pension becomes immediately payable to either of the spouse in case of death of the subscriber.

The scheme is hassle-free for the subscriber since contributions are made via auto debit facility. The only caution that the subscriber has to take is to maintain an adequate balance in the savings account.


Author Bio:-Neha Sharma is a finance student who loves to write in her free time. She has spent considerable time researching about Atal Pension Yojana. Through her work, she has explained the concept and its benefits

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