The Atal Pension Yojana (APY) is a voluntary retirement scheme for low-to-mid-income individuals aged 18 to 40, aiming to create social security for all Indians, particularly the poor, underprivileged, and unorganized sectors. The scheme replaces the previous Swavalamban Yojana and offers a fixed pension of Rs 1000, Rs 2000, Rs 3000, Rs 4000, or Rs 5000 upon reaching 60 years of age. However, the pension is determined by the individual's age and contribution amount. The spouse of the contributor can claim the pension upon the death of the contributor, and the nominee will receive the accumulated corpus. If the contributor dies 60 years, the spouse can either exit or continue the scheme for the balance period. The Pension Funds Regulatory Authority of India (PFRDA) manages the collected amount under the scheme. Government co-contribution is available for 5 years, i.e., from 2015-16 to 2019-20 for the subscribers who join the scheme during the period from 1st June 2015 to 31st December 2015 and who are not covered by any Statutory Social Security Schemes and are not income taxpayers.

The objective of the program is to provide a feeling of safety to every Indian citizen by ensuring that they do not have to be concerned about any illness, accident, or disease when they are old. Employees working in the private sector or working for such an entity without a pension benefit are also eligible to enroll in the program.

Eligibility for the Atal Pension Yojana

The following are the requirements to be eligible for the Atal Pension Yojana.

• The applicant must be a citizen of India.
• The applicant must be between the ages of 18 and 40
• Contributions should be made for at least twenty years.
• You must register your Aadhar number with a savings Bank or post office account.
• The applicant must have an active mobile phone number.

Note: There will be an automated shift to the Atal Pension Yojana for individuals now receiving benefits from the Swavalamban Yojana.

Note: Applicants must designate a nominee and provide information in the APY account.

Note: Individuals who are registered under the employees' provident fund, coal mines provident fund, Assam tea plantation provident fund, seaman's provident fund, Jammu and Kashmir provident fund, or any other statutory social security scheme are not eligible for the government portion of the contribution. This includes individuals who are classified as income taxpayers and gramin dak sevak under the service discharge benefit scheme (SDBS).

Benefits of Atal Pension Yojana 

The following are the advantages of the Atal Pension Yojana:

The contribution of the government

For a period of five years, the government gives 50% of the total amount, or INR 1,000 annually, whichever is less.

Accumulation of contributions

Depending on their payments, subscribers might get a fixed pension of INR 1,000, INR 2,000, INR 3,000, INR 4,000, or INR 5,000.

Return on Investment

According to the subscribers' preference, the pension amount under the APY scheme can be paid out in INR 1000, INR 2000, INR 3000, INR 4000, or INR 5000 slabs. As the holder becomes a bit older, the contribution amount may increase.

Tax advantages

Tax benefits are provided by the Indian government on contributions that are made to the Atal Pension Yojana program. Any investments made into the scheme are eligible for a deduction of Rs. 50,000 under Section 80CCD (1) of the Income Tax Act and a deduction under Section 80C.

Withdrawal options

• After the completion of sixty years, the subscribers can submit a request to receive a guaranteed monthly income.
• In a scenario where a subscriber dies, the nominee (default, spouse) can collect cumulative pension returns at the age of sixty.
• In the scenario where the subscriber passes away after reaching the age of sixty, the accrued pension amount will be transferred back to the nominee.

Premature Withdrawal 

• In the case that the subscriber passes away or is suffering from a terminal illness, it is permissible to withdraw before the maturity date.
• However, it is essential to note that subscribers who wish to discontinue their subscriptions voluntarily would only get their own contributions and not the government contribution or any interest that has accrued.

Penalty and additional charges

• If the savings account does not have a minimum balance by the APY deposit, there will be a penalty cost of Rs. 1 for every Rs.100. Apart from this, the Additional fees consist of:
• The service charge ranges between Rs.100 and Rs. 150 annually.
• An account opening fee of Rs. 15 per account.
• Annual account maintenance fees of Rs. 40.
• The fee for investment management is 0.0102 AUM annually.
• The maintenance cost for investments is 0.0075% for digital investments and 0.05% annually for physical deposits.

How to Create an Account for the Atal Pension Yojana in the Year 2023

To facilitate Atal Pension Yojana accounts, approved banks and post offices screen individuals to determine if they are eligible for the program. In addition to this, the establishment of an online system that allows individuals to open an APY account has also been made available by financial institutions. After the account has been established, the contribution will be automatically deducted from the savings account on a predetermined due date. This can be done by banks or post offices.

The following is a list of the minimal documentation process that is required for opening an APY account:

• To have deposits deducted from your account on a monthly, quarterly, or half-yearly basis, you should either open a savings account or provide the account number to the bank or post office.
• Submit the registration form that has been filled out and signed.
• Ensure your savings account has enough money.
• Also, you must provide your Aadhaar card and mobile number to receive periodic updates on your APY accounts.

When Can I Withdraw from the APY?

• For those under the age of sixty, withdrawal from the APY plan is not permitted; however, in exceptional situations, such as the death of the beneficiary or the onset of a terminal illness, exit may be permitted. The following are the genuine exit scenarios:
• On attaining sixty years of age, the subscriber gets a 100% annuitization of his pension wealth.
• In the case of a subscriber's death, the spouse will be eligible for the pension, and if the spouse passes away, the pension corpus will be returned to the nominee.

Penalties for Defaults

Your bank will take additional payment amounts as follows if you fail to make a payment:

• Up to Rs. 100 in monthly contributions at a rate of Rs. 1.
• Up to Rs. 101 to Rs. 500 monthly contributions, at a rate of Re. 2.
• Rs 5 per month for contributions made monthly between Rs 501 and Rs 1000.
• For contributions over Rs 1001/-per month, there is a monthly fee of Rs 10.