Atal Pension Yojana (APY): Know Its Salient Features And New Functionalities

Atal Pension Yojana (APY) is a government-backed initiative focused on improving retirement security for low-income workers. By promoting regular savings and pension options, the scheme ensures a steady income for the informal sector workers after retirement.

What Is Atal Pension Yojana?

The Atal Pension Yojana is a pension system launched in 2015-16 and is regulated by the Pension Fund Regulatory Authority of India (PFRDA). It encourages individuals, like house helpers, gardeners, drivers, and others employed in the informal sector, to save for retirement. The scheme’s primary goal is to provide financial security to old-age people from the informal sectors. Under the plan, both the subscriber and the government contribute to the pension account. The government’s contribution is 50 per cent of the monthly deposits or Rs 1,000 per annum, whichever is lower. After retirement at 60, the pensions start. Based on the contribution, they can select any of the pension slabs of Rs 1,000, Rs 2,000, Rs 3,000, Rs 4,000 and Rs 5,000. Also Read: UPS Versus NPS: Know The Key Differences Between These Two Pension Schemes

Who Are Eligible?

The following conditions must be met before investing in Atal Pension Yojana:

• Members must be at least 18 years old but not older than 40.
•  A savings account at any bank or post office is required.
• Any Indian citizen can apply for APY system.
• The Aadhaar card must be linked to the bank account for this plan.

What Are The Key APY Features

1. Pension Amount: Choose any of the five pension slabs based on your contribution and age. 2. Government Support: Govt contributes for the first five years for eligible subscribers. 3. Pension for Spouse: The spouse continues to receive the pension after accountholder’s death. 4. Tax Benefits: Contributions qualify for tax deductions under Section 80CCD.

What Is The Withdrawal Process?

Here's how you can access your Atal Pension Yojana funds. 1. Exit at 60: When you reach 60, you can start receiving your pension. For withdrawal, visit the bank where you have your APY account and request a pension withdrawal. 2. Early Exit: If you exit before 60 due to sickness or death, contact your bank to learn about the requirements. If the accountholder dies before 60, the pension will be transferred to the spouse. If both the accountholder and spouse die, the pension is given to the specified beneficiary.

Penalty for Late Payments

If you fail to contribute consistently to the plan, your bank will collect extra sums as follows:

• Re. 1 per month for contributions of up to Rs 100.
• Rs. 2 per month for contributions between Rs 101 and Rs 500 per month.
• Rs. 5 per month for contributions ranging from Rs 501 to Rs 1,000.
• Rs. 10 per month for contributions over Rs 1,001 per month.

Improved APY Functionalities:

PFRDA has introduced several new functionalities for the central record-keeping agencies (CRAs) to enhance user experience and security. • For instance, bank verification with name matching and updated bank account information are necessary to process exit or withdrawal requests of a subscriber. • Point-of-Presence or (PoPs) can now handle requests for death withdrawals online, which will require name and bank data verification via the penny drop technique. • The document upload limit has also been raised from 2 MB to 5 MB for some withdrawal requests, including pre-mature exit, superannuation and incapacitation. • Nodal offices can now upload bank details into their system through their login. • Also, subscribers must provide a unique number in their NPS account for withdrawal or exit.

Modi Hails Jan Dhan Yojana For Success Of Schemes Like APY

On the occasion of the 10th Anniversary of the Pradhan Mantri Jan Dhan Yojana on Wednesday Prime Minister Narendra Modi hailed the scheme for its impact on the targeted people. “Had it not been for the Jan Dhan Yojana, the MUDRA Yojana, or the social security schemes of the government, namely the Pradhan Mantri Jeevan Jyoti Bima Yojana, Pradhan Mantri Suraksha Bima Yojana and the Atal Pension Yojana, would never have been as impactful,” he said on X. Under the Jan Dhan Yojana, the government has opened bank accounts for over 53 crore people for free, with a combined deposit balance of over Rs 2.3 lakh crore.