In the 2015–16 Budget, the government announced the creation of universal social security programs in the insurance and pension sectors for all Indians, with a focus on the impoverished and disadvantaged. As a result, the government has declared that it will introduce the Atal Pension Yojana (APY), which will offer a defined pension based on the amount and duration of contributions.
The working poor’s old age income security is a major concern for the Indian government, which is concentrating on enabling and motivating them to enroll in the National Pension System (NPS). In order to alleviate the dangers associated with longevity among the employees in the unorganized sector and to support those employees to willingly put money aside for their retirement, making up 88% of the workforce overall 47.29 crore according to the 2011–12 NSSO Survey’s 66th Round, but have no official pension plan, the Swavalamban Scheme was initiated by the government in 2011–2010.
However, the Swavalamban Scheme’s coverage is insufficient mostly because to the absence of pension payments that are assured after age 60.
All persons in the unorganized sector who enroll in the Pension Fund Regulatory and Development Authority (PFRDA)-managed National Pension System (NPS) would be the primary target of the APY. upon the age of sixty, subscribers to the APY would get a fixed minimum pension of either Rs. 1000, Rs. 2000, Rs. 3000, Rs. 4000, or Rs. 5000 per month, contingent upon their contributions, which were contingent upon the subscribers’ age upon enrolment in the APY.
The minimum age to join APY is eighteen, and the maximum age is forty. As a result, under APY, a subscriber must have contributed for a minimum of 20 years or longer. The government would ensure that there would be a fixed minimum pension. The APY would go into effect on June 1st, 2015.
Benifits of Atal Pension Yojana
Once out, when you are 60 years old:
When the member reaches sixty years old, they will receive the following three benefits:
(i) Minimum pension amount guaranteed: After turning 60 years old, each APY subscriber will receive a guaranteed minimum pension of either Rs. 1000, Rs. 2000, Rs. 3000, Rs. 4000, or Rs. 5000 per month, till their death.
(ii) Guaranteed minimum pension amount to the spouse: Upon the subscriber’s passing, the spouse will be eligible to receive the subscriber’s pension until the spouse’s passing.
(iii) Return of the pension wealth to the subscriber’s nominee: In the event of the subscriber’s and spouse’s deaths, the nominee will be entitled to receive the pension wealth that the subscriber accrued up until the age of 60.
Section 80CCD provides tax benefits comparable to the National Pension System (NPS) for contributions made to the Atal Pension Yojana (APY) (1).
When a subscriber leaves voluntarily (before turning 60), they will only receive a refund of the money they paid into APY plus the net actual income they received from those contributions (after account maintenance charges are subtracted). But, if a subscriber chooses to leave the scheme voluntarily before the age of sixty years, they will not be entitled to both the government co-contribution and the cumulative income earned on the account of those who entered the scheme prior to March 31, 2016, and who received government co-contribution.
Death before to 60 years:
Option 1: Should the subscriber pass away before turning 60, the spouse will have the opportunity to continue making contributions to the subscriber’s APY account, which they can keep in their name for the duration of the vesting period, or until the original subscriber turns 60. Until the spouse passes away, the subscriber’s spouse is entitled to the same pension amount as the subscriber. Even if the spouse already has an APY account and pension in their own name, this additional amount would still apply.
Option 2: The spouse will receive a return of the total corpus accrued to date under the APY.
Eligibility for Atal Pension Yojana?
You needs following requirements for Atal Pension Yojna:
- Minimum Age required 18 Years Old and Maximum 40 years old.
- Must be a Indian Citizen.
- Age of exit is 60 years old.
- Minimum contribution years is 20 years.
- Required a bank account.
- A mobile number.
Participants in the statutory social security program are not eligible for this program.
Lawful social security program
- The 1952 Employees’ Provident Fund and Miscellaneous Provision Act.
- The Miscellaneous Provision and Coal Mines Provident Fund Act of 1948.
- Miscellaneous Provision and Assam Tea Plantation Provident Fund Act, 1955.
- The 1966 Seamens’ Provident Fund Act.
- Act of 1961 on the Jammu and Kashmir Employees’ Provident Fund and Miscellaneous Provision.any other legally mandated social security program.
Online Apply Process for Atal Pension Yojna
Process -1:
- Using the Net banking feature of their bank, customers can also open an APY account online.
- The candidate can check for APY on the dashboard by logging into his or her online banking account.
- The client must fill up some basic and nominee information.
- The customer must fill out the form and consent to the auto-debit of premiums from the account.
Process -2:
- Visit NSDL website and choose Atal Pension Yojna
- Select APY Registration
- Fill Basic details
- Offline KYC: This type of KYC involves uploading an XML file of Aadhaar.
- Adhaar: Online KYC involves using an OTP verification on a mobile number to register for an Aadhaar.
- virtual ID: Aadhaar virtual ID is created for KYC under virtual identification.
Required Document:
- Aadhaar Card
- Active Bank Account
Monthley Contribution Chart: APY_Subscribers_Contribution_Chart_1
Scheme guideline: APY_Scheme_Details
Penalty
Individual subscribers will be able to choose to contribute on a monthly basis under APY. The amount that banks would charge for overdue payments will range from a minimum of Rs. 1 to Rs. 10 each month, as indicated below:
• Rs 1 monthly contribution of up to Rs. 100 is accepted.
• A contribution of Rs. 2 per month up to Rs. 101–500/-per month.
• For contributions between Rs. 501/- and Rs. 1000/-per month, there is a fee of Rs. 5.
• If the monthly donation exceeds Rs. 1001/-, it is Rs. 10.
Discontinuation of payments of contribution
- The account will be frozen after six months.
- The account will be terminated after 24 months and disabled after 12 months.
Withdrawl process for Atal Pension Yojna
It is not possible to leave the APY system before turning 60, however there are certain rare exceptions, such as when a beneficiary passes away or develops a terminal illness. Thus, these are the real departure scenarios:
- When a person reaches 60 years old, their pension wealth is fully annuitized for them.
- In the event of the subscriber’s death, the nominee will receive the pension corpus back. The spouse will have access to the pension.