Atal Pension Yojana
Atal Pension Yojana (APY) was announced by Government of India during 2015-16 budget. Ever since, the Atal Pension Yojana has enabled many Indians to secure their future post retirement.
The Atal Pension Yojana scheme is administered by the Pension Fund Regulatory and Development Authority (PFRDA) through NPS (National Pension System) architecture.
Contributions made by an individual under Atal Pension Yojana are eligible for the deductions under section 80CCD of the Income Tax Act, 1961, subject to the conditions specified therein.
“As our young population ages, it is also going to be pension-less. Encouraged by the success of the Pradhan Mantri Jan Dhan Yojana, I propose to work towards creating a universal social security system for all Indians that will ensure that no Indian citizen will have to worry about illness, accidents or penury in old age”, said Finance Minister Jaitley in his 2015-16 Union Budget speech. In keeping with this ideal, a National Pension Scheme, the Atal Pension Yojana was effected from May, 2015. The scheme intends to bring pension benefits to people of the unorganized sector so that they can enjoy social security with a minimum contribution per month.
People who work in the private sector or are employed in occupations that do not give them the benefit of pension can apply for this scheme. They can opt for a fixed pension of INR 1,000 or 2,000 or 3,000 or 4,000 or 5,000 on attaining the age of 60. The amount of contribution and the individual’s age will determine the pension. Upon the contributor’s death, the spouse of the contributor can claim the pension and after the spouse’s death the nominee will be returned the corpus accrued.
The amount collected under the scheme is to be managed by Pension Funds Regulatory Authority of India (PFRDA) as per the investment pattern specified by the Government of India. Individual applicants will have no choice of pension funds or investment allocation.
Benefits of Atal Pension Yojana (APY)
The Atal Pension Scheme will bring security to ageing Indians while at the same time promote a culture of savings and investment among the lower and lower middle class sections of society. One of the greatest benefits of the scheme may be enjoyed by the poorer sections of society. The government of India has decided to contribute 50 percent of the user’s contribution or INR 1,000 a year (whichever is lower) for a period of five years. This contribution will, however, be enjoyed only by those who are not income tax payers and those who join the scheme before 31 December 2015.
Who is Eligible for Atal Pension Yojana?
The Atal Pension Yojana (APY) is open to all Indians between the age of 18 and 40. This allows an individual to contribute for at least 20 years before reaping the benefits of the scheme. Any bank account holder who is not a member of any statutory social security scheme can avail of the scheme.
All existing members of the government’s ‘Swavalamban Yojana NPS Lite’ will automatically be migrated to the Atal Pension Yojana. It will now replace the Swavalamban scheme, which did not gain much popularity across the country.
How to Enroll for Atal Pension Scheme?
To sign up for the Atal Pension Yojana, an account holder must fill in an authorization form and submit it to his/her bank. The form will require complete details including account number, spouse and nominee details, and authorization for auto debit of contribution amount. Account holders signing up for the scheme need to ensure that sufficient balance is maintained in the account every month, failing to do so will attract a monthly fine of –
INR 1 for monthly contribution up to INR 100
INR 2 for monthly contribution between INR 101 and INR 500
INR 5 for monthly contribution between INR 501 and INR 1,000
INR 10 for monthly contribution beyond INR 1,001
If no payment is made towards the scheme
for six months, the holder’s account will be frozen
for 12 months, the holder’s account will be deactivated
for 24 months, the holder’s account will be closed
For those who does not have a bank account:
A person needs to open a bank account first by submitting the KYC document and Aadhar card. He/she is also required to submit the APY proposal form.
Exiting the scheme:
Under ordinary circumstances, an account holder who has enrolled for the Atal Pension Yojana will not be able to exit the scheme before the age of 60. Exiting the scheme is only possible in special circumstance such as in the event of the death of the beneficiary.
Recent Developments
- Government will extend the benefit of the APY via Post Offices all over the country so as to bring more people under its ambit. The implementation of the scheme through post offices is expected to be more helpful for the people in rural areas.
- In March 2016, the government amended the scheme’s provisions to give the subscriber’s spouse an option to continue contributing to the account for the balance period on premature death of the subscriber.
- The Government released Rs 100 crore towards its co-contribution for Atal Pension Yojana (APY) in 2015-16 fiscal.
- Also, as per the circular released by the Income Tax department, contributions to the Atal Pension Yojana (APY) are now eligible for the same tax benefits as the National Pension System (NPS). The tax benefits include an additional deduction of Rs 50,000 under section 80CCD(1) introduced in year 2015 Budget.
- To increase the outreach of Atal Pension Yojana (APY) among the prospective subscribers in the country, The Pension Fund Regulatory and Development Authority of India (PFRDA), on August 19, 2016, has integrated the APY module with the bank’s core banking system, allowing enrollments to happen through people’s saving accounts. It will not only make the process convenient, but a whole lot faster and hassle-free. The customers would not be required to submit physical forms to the bank from now on, and a web-based APY subscriber registration mode has been allowed for customers with net-banking accounts.
Features and Benefits:
- Fixed pension by the Government ranging between Rs. 1000 to Rs. 5000 per month at the age of 60 years
- Spouse will continue to draw pension in the event of death of Subscriber
- Nominee to receive corpus up to Rs. 8,50,000/-# in case of death of both subscriber and spouse
- Contribution to be remitted monthly through Auto Debit from linked Savings Bank Account
- GoI will co-contribute* 50% of subscriber contribution or Rs. 1000 p.a. whichever is lesser for a period of 5 years
Table showing fixed monthly pension:
Age of Joining
|
Years of
Contribution
|
Indicative Monthly
Contribution (in Rs.)
|
Monthly Pension to
the subscribers and his spouse (in Rs.)
|
Indicative Return
of Corpus to the nominee of the subscribers (in Rs.)
|
18
|
42
|
210
|
5000
|
8.5 Lakh
|
20
|
40
|
248
|
5000
|
8.5 Lakh
|
25
|
35
|
367
|
5000
|
8.5 Lakh
|
30
|
30
|
577
|
5000
|
8.5 Lakh
|
35
|
25
|
902
|
5000
|
8.5 Lakh
|
40
|
20
|
1454
|
5000
|
8.5 Lak
|
Eligibility:
- Available only to Indian Citizen
- Age should be between 18 to 40 years
- Must have a valid Savings Bank Account
Exit
and Pension Payment
|
|
Before
60 Years
|
No
withdrawal permitted except in the event of terminal disease or death of
subscriber
|
After
60 Years
|
Pension
amount as selected by the subscriber
|
In
event of death of subscriber
|
Before
60 years - Entire corpus to be returned to the Spouse/Nominee
After 60 years - Spouse will continue to draw monthly pension while Nominee will receive corpus amount in case of death of both subscriber and spous |
Tax Benefits:
Contributions made by an individual under Atal Pension Yojana are eligible for the deductions under section 80CCD of the Income Tax Act, 1961. Maximum deduction allowed under section 80CCD(1) of the Income Tax Act, 1961 is 10% of gross total income subject to maximum deduction of Rs. 1,50,000 p.a. as specified under section 80CCE of the Income Tax Act. An additional contribution of Rs. 50,000 p.a. is eligible for an additional deduction of Rs. 50,000 p.a. under section 80CCD(1B) of the Income Tax Act, 1961. These deductions are subject to the fulfillment of the conditions mentioned in the Income Tax Act, 1961. Tax laws are subject to amendments from time to time. This is not a legal advice or tax advice and users are further advised to consult their tax advisors before making any decision or taking any action
source:http://www.mapsofindia.com
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