Atal Pension Yojana (APY): Enrolment, eligibility & benefits

Old age brings wisdom, but it can also bring financial challenges. Without a steady source of income post-retirement, many individuals, especially those in the unorganised sector, struggle to meet basic needs. The Government of India recognised this gap and introduced the Atal Pension Yojana (APY) to provide financial security during retirement. This scheme is helpful for people who are not covered by any formal pension system.

This blog provides a complete guide to the APY scheme, its enrolment process, benefits, eligibility, and more.

What is the Atal Pension Yojana (APY) scheme?

The Atal Pension Yojana scheme, backed by the government, is primarily targeted at workers in the unorganised sector, such as maids, drivers, delivery agents and gardeners. It was launched in 2015 and is regulated by the PFRDA or Pension Fund Regulatory and Development Authority.

Under APY, subscribers will receive a fixed pension amount—ranging from ₹1,000 to ₹5,000 per month—after the age of 60, based on their contribution and age at entry. Upon the subscriber's death, the Atal pension yojana details are passed on to the spouse and later, the corpus amount is given to the nominee.

Key features of Atal Pension Yojana

Here are some key features of the scheme:

• Available to Indian citizens between 18 to 40 years of age
• Monthly pension of ₹1,000 to ₹5,000 after turning 60
• Minimum contribution period: 20 years
• Auto-debit facility ensures the timely contribution
• Co-contribution by the Government (for eligible subscribers enrolled before Dec 2015)
• Managed by PFRDA with a safe investment pattern

Benefits of Atal Pension Yojana (APY)

Its benefits are:

• Atal pension yojana benefits financial security during old age by providing a fixed monthly pension after retirement.
• Offers a low-risk investment option as the scheme is regulated and managed by the government.
• Provides tax benefits with contributions eligible for exemption under Section 80CCD of the Income Tax Act.
• Covers the subscriber's family by continuing the pension for the spouse after the subscriber's death.

How to enrol for Atal Pension Yojana?

You can either apply online or offline.

Online mode:

• For Atal pension yojana online apply, log in to Internet banking of your savings account.
• Search for the APY option.
• After Atal pension yojana login, fill in the form and enable auto-debit
• Only selected banks offer this feature

Offline mode:

• Visit your bank or post office
• Collect and fill out the APY form
• Submit with a photocopy of Aadhaar
• Provide a valid mobile number for confirmation alerts

Eligibility criteria under the APY scheme

To enrol in APY, the individual must:

• Be an Indian citizen
• Be aged between 18 and 40 years
• Have a savings bank account
• Link Aadhaar and mobile number with the bank account
• Be willing to contribute for at least 20 years

Documents required for the APY scheme

Here is a list of the required documents:

• A completed Atal pension yojana registration form
• Aadhaar card (photocopy)
• Valid mobile number
• Active savings bank or post office account

Monthly contribution of the Atal Pension Yojana

You can keep track of your contribution with the help of an APY pension calculator.

Penalties for delayed contributions to a pension

Late contributions attract the following penalties:

• 1 per month for contributions up to ₹100
• 2 per month for ₹101–₹500
• ₹5 per month for ₹501–₹1,000
• ₹10 per month for contributions above ₹1,001
• Accounts may be frozen after 6 months
• Accounts may be deactivated after 12 months and closed after 24 months of non-payment.

How does the Atal Pension Yojana work?

Here's how the scheme works:

• Subscriber chooses a pension amount
• Contribution begins immediately and continues until age 60
• The amount is debited automatically from the bank account
• At 60, pension begins
• After the subscriber's death, the pension goes to the spouse
• On the death of both, the nominee receives the corpus
• In special cases like terminal illness or death before age 60, the spouse can either claim the corpus or continue the contributions.

Key things to know about the Atal Pension Yojana (APY)

Important things to remember:

• Early withdrawal is allowed only in cases of death or serious illness
• Subscribers can increase or decrease their pension amount by informing the bank
• Insufficient balance will lead to penalties
• The scheme allows only one APY account per person
• The government's contribution is not available for income taxpayers
• APY account must be linked to a savings account with auto-debit enabled

FAQs

1. What is the minimum and maximum age for Atal Pension Yojana apply?

The minimum age is 18 years, and the maximum is 40 years.

2. Can I exit APY early?

Only in cases of death or terminal illness. Otherwise, early exit will only return your contribution with interest, excluding the government co-contribution.

Conclusion

The Atal Pension Yojana is a powerful tool for anyone looking to secure their future. Medical costs, especially in India, are rising steadily. While the Atal pension yojana ensures monthly income, it is equally wise to plan for medical emergencies with health insurance plans. Getting health insurance for family can help you and your family during unexpected medical emergencies.

Disclaimer: The information provided in this blog is for educational and informational purposes only. It is not intended as a substitute for professional advice, diagnosis or treatment. Please consult a certified medical and/or nutrition professional for any questions. Relying on any information provided in this blog is solely at your own risk, and ICICI Lombard is not responsible for any effects or consequences resulting from the use of the information shared.