Atal Pension Yojana

Published Date - 31 August 2017 09:23:59 Updated Date - 25 October 2017 06:39:49

Atal Pension Yojana (previously known as Swavalamban Yojana) is a government-backed pension scheme in India  targeted at the unorganised sector. It was originally mentioned in the 2015 Union budget  speech by Finance Minister by Finance Minister Arun Jaitley in February 2015. It was formally launched by Prime Minister Narendra Modi  on 9 May in  Kolkata  As of May 2015, only 11% of India's population has any kind of pension scheme, this scheme aims to increase the number.

In Atal Pension Yojana, for every contribution made to the pension fund, The Central Government would also co-contribute 50% of the total contribution or ₹1,000 (US$16) per annum, whichever is lower, to each eligible subscriber account, for a period of 5 years. The minimum age of joining APY is 18 years and maximum age is 40 years. The age of exit and start of pension would be 60 years. Therefore, minimum period of contribution by the subscriber under APY would be 20 years or more.

Aadhaar would be the primary KYC document for identification of beneficiaries, spouse and nominees to avoid pension rights and entitlement related disputes in the long-term. For Address proof, individual may submit copy of ration card, copy of bank passbook is also accepted.

The subscribers are required to opt for a monthly pension from Rs. 1000 – Rs. 5000 and ensure payment of stipulated monthly contribution regularly. The subscribers can opt to decrease or increase pension amount during the course of accumulation phase, as per the available monthly pension amounts. However, the switching option shall be provided once in year during the month of April.

This scheme will be linked to the bank accounts opened under the Pradhan Mantri Jan-Dhan Yojana(P.M.J.D.Y) scheme and the contributions will be deducted automatically. Most of these accounts had zero balance initially. The government aims to reduce the number of such zero balance accounts by using this and related schemes.

According to the circular released by the Income Tax Department of India, the contributions under Atal Pension Yojana will now be applicable to the tax benefits. Under section 80CCD(1) introduced in last year’s budget, tax benefits include the additional deduction of Rs 50,000.

 Atal Pension Yojana is a National Pension Scheme introduced by Prime Minister Narendra Modi last year and is open to all Indian citizens between the age of 18 to 40 years. The scheme has so far recorded a great response as about 20 Lakh subscribers have already joined it.

One of the reasons of so many people subscribing for the scheme is that Government will contribute 50% of teh contribution made by the subscriber fro a period of up to 5 years. The government contribution, however, will be applicable only to those who apply for the scheme before 31st March 2016 and make a maximum contribution of INR 1000 per year.

 

 


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