Atal Pension Yojana (APY) comes out to be a financial boost up for those who are employed with unorganized sector and small scale industries. A major section of the Indian population works in small scale sectors wherein there is no secured pension scheme and thus those people are certainly at risk when it comes to financial security. Atal Pension Yojana would be a low-cost pension scheme that would help to build up the social security mechanism in the country. Announced by the Finance Minister Mr. Arun Jaitley, Atal Pension Yojana would come into effect on 01st of June, 2015 and would also carry forward those who are already getting benefitted under the previously launched Swavalamban Scheme, automatically.
Just like Swavalamban Scheme, Atal Pension Yojana too would be governed and managed under the Pension Fund Regulatory and Development Authority (PFRDA) and hence the enrollment agencies which have been involved in the former scheme would be taking care of the enrollment for Atal Pension Scheme too.
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Who is Eligible
Atal Pension Yojana is a scheme that is open for anyone who has attained an age of 18 years and the maximum cap of the scheme is 40 years. This implies that anyone who has entered under this scheme at the age of slightly less than 40 years would have a contribution for at least 20 years.
For those covered under Atal Pension Yojana at a younger age would have more contributions in the same way. Anyone who falls under the age of 18 years and 40 years is eligible to take the benefits of this scheme.
Atal Pension scheme is targeted for people who are working in unorganized sectors of industries and are not financially secured from either government or their employers. A lot of people living under the poverty line would surely be benefited from this scheme.
Minimum and Maximum pension amount
As per the Atal Pension Yojana, a person under this scheme would start getting his or her pension after the age of 60 years. As per the contributions of an individual, the pension amount may range anywhere between Rs 1,000 to Rs 5,000. It is also important to mention that the more the contributions of an individual are, the more would be their pension. For example, someone who has joined the pension scheme at the age of 18 years would surely get more pension amount than someone joining the scheme at the age of 40 years, with the same contributions made by both the individuals.
The Government’s Contribution
The government would be backing this entire scheme in all possible ways. There is a provision announced by the Finance Minister in the current budget that anyone who joins Atal Pension Scheme before 31st December 2015 is eligible for getting a contribution of 50 percent from the Government and the amount of contribution would be a maximum of Rs 1,000 per year for a total of five years. That means the government’s contribution would be added to the pensioner account from 2015-16 to 2019-20. After that, the benefits of the government’s contributions would be given to non-income tax paying subscribers.
These government benefits won’t be passed if you already have any existing EPF account of If you are a Tax Payer.
Premium / Subscription / Contribution Amount
There is a contribution table that clearly states the amount of pension an individual would be getting with whatever contribution he chooses to deposit in their pension account. The idea is that if someone joins the scheme at an early age, he would have to pay less as a premium to get the same pension than someone contributing a greater amount at higher age and getting the same pension amount. For Details Click Here
Since this scheme is launched by the Government of India, it would certainly have backing from the central government agencies as far as contributions and benefits are concerned.
Mode of payment for premium/subscription/contributions
APY payment is done through the auto-debit facility. The Atal Pension Yojana will have its primary focus on every citizen working in unorganized sectors and those who have joined NPS (National Pension System) under PFRDA. They should, however, be not a part of any other pension or social security scheme.
The benefits and receipt of pension are guaranteed by the government and thus it is considered to be one of the safest pension options for those who are not yet enrolled in any other social security scheme. Atal Pension Yojana is simply an initiative by the Narendra Modi Government at the center to address the security of working poor in the country and encourage them to voluntarily save money for their retirement and old age. While the unorganized labor comprises of around 88% of the total workforce in India, this scheme would certainly be a blessing as far as social security is concerned.
Start Date and Last Date of Atal Pension Yojana
Atal Pension Yojana would start effective 1st June 2015. There is no last date for this scheme.
Tax Benefits in Atal pension Yojana
As of now, there is no tax benefit on Atal Pension. You won’t get any 80C benefit for the premium that you would pay. Even the pension that you would get after you attain 60 years of age would be taxable.
What Would Happen if Subscriber dies
If you are the subscriber of Atal Pension Yojana and die after 60 years then your spouse would continue to get the Pension. After both of you have died the corpus amount promised would be transferred to your nominee. If the subscriber dies before 60 years then account would be closed and the accumulated amount would be given to Spouse/Nominee.
Note: NRIs cannot apply for this pension scheme.
Nominee in Atal Pension Yojana
There is a facility to add nominee with the Atal Pension Yojana scheme. Nomination facility is very important is every investment plan, especially those which are pension-related. Atal Pension Yojana is a flagship retirement policy of the present ruling NDA Govt. which aims to provide pension to the citizens after they attain the age of 60 years. This pension scheme with a nomination facility was launched especially for the low income and economically backward classes.
Those who do not have a fixed monthly salary or do not enjoy financial stability were encouraged to join the Atal Pension scheme to get retirement pensions, just like those who do govt. jobs.
How to add a nominee to the Atal Pension Yojana?
One can add the nomination details along with the Atal Pension Yojana. Having a nominee is very essential for these types of retirement policies as after the sudden death of the user of the retirement policy, the nominee will get the retirement benefits. The nominee can be appointed in the Atal Pension scheme at the time of filling up the application form for the same. The name, particulars, and relationship of the nominee is to be mentioned in the application form.
One can also add the name of the nominee even after opening the APY account. For that, they will have to contact the respective bank or post office from where the APY account has been opened.
Nature of nominee applicable
The nominee who can be added to the Atal Pension scheme may be the spouse of the beneficiary or the depending family member (s). They will get the retirement corpus if the user of the APY scheme dies. So even after the death of the account holder of the APY, the retirement corpus will be given to the nominee registered. So it is very important to register a nominee along with the APY scheme. However, it is not possible to add a nominee after the death of the account holder. In this case, the account will get freeze and no retirement corpus will be provided. So the nomination procedure is to be done well in advance.
Atal Pension Yojana Age Limit
Narendra Modi is coming up with so many lucrative schemes for all masses one by one. The Latest Released Atal Pension Yojana is one of them and an instant hit. Atal Pension Yojana is aimed to provide pension to any Citizen of India.
Pension used to be a so-called benefit why the government jobs were one of the most sorted jobs in India. But now anyone can get the Pension thanks to PM’s Atal Pension Yojana.
Any person above 18 years of age and below 40 years can avail of this scheme. As soon as you join this scheme you will have to invest in this fund till you become 60 years old.
Atal Pension Yojana Advantages
The Atal Pension Yojana (APY) is directed towards the citizens working in the unorganized sector who desire to join the National Pension System (NPS). However, one important requirement of the scheme is that individuals interested in benefiting out of APY should not be a member of any other social security system.
The Atal Pension Yojana, which started from 1st June 2015, has advantages like a fixed pension for the subscribers. The amount of pension received can be between Rs. 1000 to Rs. 5000 depending on the age at which the contributor joins the scheme. Any Indian citizen between the age of 18 and 40 years can apply for this scheme. If the subscriber joins early the amount to be paid towards the scheme would be low and if he/she joins late, the amount would increase accordingly.
The APY will benefit citizens by providing them security during their old age. Additionally, it will also encourage the culture of investment and saving among the lower middle and poor strata of the society.
Another benefit of the scheme is that every year (for five years) the Indian government would contribute 50 percent of the user’s contribution or INR 1000 (whichever is less) towards the scheme. This facility can be enjoyed by those subscribers who join the scheme before December 31, 2015, and those who are not income taxpayers.
The APY will address the old age income security of 88% of the total labor force that constitute the workers in the unorganised sector. It will also encourage these workers to join the National Pension System.
Besides the Atal Pension Yojana, the government of India also launched two separate insurance schemes recently. These are namely, the Pradhan Mantri Suraksha Bima Yojana and the Pradhan Mantri Jeevan Jyoti Bima Yojana. These insurance schemes will benefit a large population of the country who are without a cover of any kind.
News Related to This Scheme
HP Government to contribute Rs 1000 per person under Atal Pension Yojana
The Himachal Pradesh government has decided to contribute up to Rs 1,000 for each beneficiary of the Atal Pension Yojana Account. “Going beyond the Atal Pension Yojana, the state government has decided to give a contribution to MNREGA workers, agricultural and horticultural laborers, farmers and other persons in unorganized sectors, who subscribe to this Yojana,” an official spokesman said.
Till date, as many as 16,119 people have been enrolled in the state and the government has transferred a sum of Rs 1.03 crore to the accounts of these beneficiaries on account of the state government’s contribution, which implies that the average contribution of the state government is Rs 639 per subscriber.
100 crores released towards GoI Co-contribution in Atal Pension Yojana
Atal Pension Yojana is being implemented through the APY Service Providers comprising of Public Sector Banks, Private Sector Banks, Regional Rural Banks, Cooperative Banks and Department of Post both in urban and rural areas across the country. The total number of subscribers registered under APY as on 30th June 2016 has crossed 30 lakhs and every day nearly 5000 new subscribers are added.
The scheme provides for a co-contribution from the Government of India for those who have registered before 31/3/2016 with an amount of 50% of the subscriber’s contribution up-to a maximum of Rs. 1000/- and these subscribers will be eligible for co-contribution for a period 5 years from 2015-16 to 2019-20 only those subscribers who are not income taxpayers and not part of any other social security schemes are eligible for GoI co-contribution. Keeping in view the above, GoI through PFRDA has released co-contribution for the FY 2015-16 for 16.96 lacs eligible subscribers amounting to Rs. 99.57 crores.
The Subscribers who have any pending contributions in their APY account till March 2016 won’t be paid with co-contribution. They have been advised by PFRDA to regularize their APY account to get GoI co-contribution in September. GoI co-contribution is payable only when accounts are regular and the admissible GoI co-contribution is paid into the Savings Bank account of the Subscribers.
Atal Pension Yojana provides minimum guaranteed pension ranging between Rs. 1000/- to Rs. 5000/- per month for the subscriber from the age of 60 years. The same amount of pension is paid to the spouse in case of a subscriber’s demise. After the demise of both i.e. Subscriber & Spouse, the nominee would be paid the pension corpus. Option for Spouse to continue to contribute in APY account of subscriber for the balance period on premature death of subscriber before 60 years, to avail pension by Spouse.
Tax benefits at entry, accumulation, and pension payment phases. If the actual returns on the pension contributions during the accumulation phase are higher than the assumed returns for the minimum guaranteed pension, such excess returns are passed on to the subscriber, resulting in enhanced scheme benefits.
Changes in Atal pension Yojana
Subscribers can now make contributions on a monthly, quarterly or half-yearly basis as against the earlier stipulation of mandatory monthly contributions. The modified scheme also permits for premature exit from the scheme before attaining 60 years. Subscribers can exit voluntarily but they will be refunded only their share of contributions and the interest earned on those contributions. They will not get the government’s contribution or the interest accruing on that amount.
The government has also simplified the levy of penalty for delayed contributions. A penalty of Rs.1 for a contribution of Rs.100 will be levied per month for each delayed monthly payment instead of the different slabs given earlier.
The account will not be closed and deactivated until the account balance becomes zero due to the deduction of account maintenance charges and fees. However, the account balance will be calculated based on the money paid by the subscriber without taking into account the government’s contribution.
Now you can get enrolled for Atal Pension Yojana through Savings Bank Account
Banks can now enroll prospective subscribers of the Atal Pension Yojana (APY) by fetching their savings bank account details, making the process faster and hassle-free. The Pension Fund Regulatory and Development Authority of India (PFRDA) has been taking all necessary steps to ensure that people can easily join APY. The move is aimed at expanding the outreach of the entire eligible population of the country through the APY module which is integrated with the bank’s core banking system (CBS), the PFRDA said today.
“The banks have to simply enter the savings bank account number of the prospective subscriber and the APY module automatically fetches the required details from the bank’s master database and the subscriber is allotted Permanent Retirement Account Number (PRAN) immediately,” the pension fund regulator said in a release. Having generated the PRAN, a subscriber of APY can make contributions on a monthly/quarterly/half-yearly basis without any hassle as the amount is deducted towards APY account by debiting from saving bank accounts directly.
Under APY, all Indian citizens in the age group of 18-40 years can join the scheme. So far 31.85 lakh subscribers have registered under the scheme, the PFRDA said. It guarantees a retirement pension of Rs 1,000-5,000 per month, depending upon the contribution made by the subscriber. Additionally, PFRDA already facilitates the internet savvy people as they can join APY through their Internet banking. Leading banks in the country like SBI and ICICI are already offering this facility through net banking. Many other banks have also expressed interest to provide this facility to their customers, the regulator said.
“To simplify enrollment in APY, an internet-based APY subscriber registration mode has been allowed for those applicants who have net-banking accounts. Banks can enroll such applicants in APY through their net banking platforms by capturing the information on the online application form,” the PFRDA added.No physical form is required to be submitted to the bank by the customer, it said.
Increased coverage under Atal pension scheme
The government has asked banks to take steps to increase coverage under the Atal pension scheme as lenders failed in meeting the sales target for the social security scheme in the last financial year. APY was launched by Prime Minister Narendra Modi in May last year. Banks have been asked to ensure wide coverage under the Atal Pension Yojana (APY). Public sector banks (PSB) were assigned targets in two phases. The first phase was up to December 31, 2015, while the second phase concluded on March 31, 2016. However, all the large PSBs, including the State Bank of India, fell short of the target by a wide margin.
For the first phase, SBI was able to enroll just 2,83,553 people under the scheme against the target of 44,80,000, according to the sources. In the second phase, SBI was able to enroll 50,315 people under the scheme against the target of 4,86,180. Punjab National Bank was able to enroll 1,50,510 people against the projected target of 17,23,120, thus achieving merely 8.73 percent of the target.
In the second phase, PNB was able to enroll 35,473 people against the target of 1,86,720. Smaller banks, however, fared well compared to their large peers. Andhra Bank achieved 23.25 percent and 26.28 percent target in the first phase and second phase respectively. Similarly, Indian Bank achieved 13.22% and 21.31% in the first phase and second phase respectively, official data showed.
The government has asked PSBs to oversee the performance of regional rural banks sponsored by them. Moreover, RRBs have been asked to improve their APY activation, sources said. The government has asked to tap channels like business correspondents, aggregators, and microfinance institutions to provide the benefits of APY to target beneficiaries at the grass-root level, they added.
Moreover, the banks have been advised to offer APY to their customers through alternate channels such as net banking and all the state-run banks have been asked to increase their branch participation in APY to ensure wider coverage. Post-de-regulation of aggregators’ incentive, banks have been instructed to fix the sharing structure as per their likings and they may take advantage of this opportunity to maximize enrolments.