APY is a pension scheme offered by Government of India. It mainly focuses on the workers of the unorganised sectors.
Under this scheme a person gets a pension of minimum Rs.1000, Rs.2000, Rs.3000, Rs.4000, or Rs.5000 per month as pension depending on the contributions made by him/her on attaining the age of 60 years.
Who can apply for APY?
Any Indian citizen is eligible to apply for this pension scheme.
However a particular individual can open only one account under this scheme.
Eligibility
The age of the subscriber should be between 18 to 40 years.
He/she should have an operative savings account at any bank or post office.
How to open APY account?
APY can be opened by following procedure:
- Fill the APY registration form at the bank where you are holding your savings bank account.
- Provide your Aadhar or mobile number. However, it is not mandatory but by providing this,the communication regarding contributions made by you can be done easily by bank.
- Submit the application form at the bank or post office.
- https://npscra.nsdl.co.in/nsdl/forms/APY_Subscriber_Registration_Form.pdf
Contributions and pension
https://www.npscra.nsdl.co.in/nsdl/scheme-details/APY_Subscribers_Contribution_Chart_1.pdf
How to contribute?
One can contribute at monthly/quarterly/half yearly intervals through auto-debit facility from savings bank account/post office savings account.
The monthly/quarterly/half yearly contribution depends upon the amount the subscriber wants to receive as monthly pension and the age of the subscriber at the time of Opening APY account.The contribution can be paid to APY through savings – bank account/ post office account :
- On any date of the particular month for monthly contributions.
- Any day of the first month of the quarter, in case of quarterly contributions.
- Any day of the first month of the half year, in case of half-yearly.
The subscriber is eligible to change the mode monthly/quarterly/half yearly) of auto debit facility once in a year during the month of April.
Overdue interest will be levied on the contribution.
Bank or post office will collect Rs. 1 per month for contribution of every Rs. 100 for each delayed contribution.
Overdue interest for quarterly/half yearly mode of contribution can also be recovered similarly.
The amount collected via overdue interest is considered as part of the pension corpus of the subscriber.
The overdue amount will be recovered whenever the funds are available in the account.
Government contribution
For those who joined the scheme during the period 1st June 2015 to 31st March 2016 and was not a beneficiary of any social security scheme and not an income tax payer, the Government contributed 50% of the total contribution or Rs. 1000 per year, whichever was lower. The Government co-contribution was given for 5 years from the Financial Year 2015-16 to 2019-20.
Benefits
There are two things in APY – actual realised returns on the pension and assumed returns.
The benefit of minimum pension is that if the actual realised returns are less than the assumed returns, the shortfall will be funded by the Government and assumed minimum pension will be granted to the subscriber.
However if the actual realised returns are higher than the assumed returns then the excess amount will be credited to the account of the subscriber.
At present, a subscriber under the Atal Pension Yojana will get tax benefit for the contribution, up to a certain limit, and also for the investment returns on such contributions.
Withdrawal from APY
- The monthly pension starts when the subscriber attains the age of 60 years. For this the subscriber has to submit a request application to the concerned bank / post office.
- In case of death of the subscriber after the age of 60 years :- If the subscriber dies after the attaining the age of 60 years, the spouse of the subscriber will be eligible for the same pension amount and on the death of both of them (subscriber and spouse), the nominee will get the amount accumulated till the age of 60 years of the subscriber.
- In case of death of the subscriber before the age of 60 years :- If the subscriber dies before attaining 60 years of age, two options are available to the spouse of the subscriber – either to continue the contribution in the APY , which will be maintained in the spouse’s name, for the remaining period, till the original subscriber would have attained the age of 60 years. The spouse of the subscriber will receive the same pension amount as the subscriber. Or, the entire accumulated amount under APY will be returned to the spouse/nominee.
Closure of APY
Exiting before the age of 60 :- In case the subscriber chooses to withdraw from APY scheme, the contributions made by him/her till date will be refunded along with the net accrued income on the contributions made by the subscriber.If the subscriber has availed Government co-contribution under APY, he/she will only be entitled to receive the contributions made by him/ her to APY and the net accrued income on his / her contributions. He / she will not be eligible to receive the co contributions made by the government and the accrued income earned on the Government co contribution.
Is nomination mandatory under APY?
Yes it is mandatory to provide nominee details in the APY account. If the subscriber is married, the spouse will be the default nominee. Unmarried subscribers can nominate any person as nominee & they have to provide spouse details after marriage.
Can pension amount be increased or decreased later?
Yes if the subscriber wants to decrease or increase pension amount during the contribution phase, he /she can increase or decrease the pension amount once in a year.
The subscriber can change the mode (monthly/quarterly/half yearly) of auto debit facility once in a year during the month of April.
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