About:
A new scheme, Atal Pension Yojna (APY) has been launched by the government with effect from June 1, 2015, which provides the strategic direction for shaping the pension landscape in the country to convert the society from a pension less to pensioned one in the largely uncovered informal sector. As pension involves a long term commitment, there is a need to create awareness and financial literacy to encourage informal sector workers to save for their retirement. Under Atal Pension Yojna, the central government co-contributes 50% of the subscriber’s contribution or Rs.1,000 per annum, whichever is lower, to each eligible subscriber account, for 5 years, i.e. from 2015-2016 to 2019-2020, and who are not income taxpayers. There is an option from which those who opt can get a fixed pension on attaining the age of 60of Rs 1000, Rs 2000, Rs 3000, Rs 4000, or Rs 5000. The pension will be decided based on the individual’s age and the contribution amount. Upon the contributor’s death, the spouse contributor can claim the pension, and upon the death of both the contributor and his/her spouse, the nominee will be the one who can avail the accumulated corpus. However, if the contributor dies before completing the age of 60 years, then the spouse is also having an option to either not continue the scheme and claim the accumulated corpus or continue the scheme for the remaining period.
Eligibility:
There are some eligibility criteria if you want to opt the Atal Pension Yojna you have to fulfill the conditions which are as follows:
- The applicant must be a citizen of India to avail of this scheme.
- His age should be between 18-40 years.
- He should at least make contributions for 20 years.
- He must have a bank account that is linked with hisAadhaar.
- The applicant must have a valid mobile number.
Points on Atal Pension Yojna:
- As it is a periodic contribution, you have to make sure that you have sufficient balance in your bank account as the amounts will be debited automatically from your account.
- If you want to increase the amount of contribution, you can do so by just contacting your bank branch and ask the manager to modify the same.
- If there is a default on your payments, then a penalty of Rs.1 per month for the contribution you made of every Rs. 100 or part thereof is levied.
- Be careful if you default the payment till 6 months then your account will be frozen and if the default goes beyond 12 months your account will be closed.
- You can not make an early withdrawal. You can do only in cases like death or terminal illness, the subscriber, or his/her nominee will receive the entire amount back.
- If you close the Atal Pension Yojana scheme before attaining the age of 60 years for any other reason, then in that case only your contribution along with the interest earned will be returned to you. Then you will not be eligible to receive the part of the government’s co-contribution or the interest earned on that amount.
If you want to add a fund that helps to provide you tax benefit then this scheme helps you take the benefit of deduction in income tax for the number of contributions made by an individual. The deduction is allowed under section 80CCD.
