The Atal Pension Yojana is a boon for the workers of unorganized sectors. This scheme will guarantee pension for all Indians who are over the age of 60. In your early years, you can contribute to the scheme and when you get old, you will get the benefits. The benefits will be in the form a monthly pension, and the amount will depend on your earlier contributions.
The government will also contribute, and it will depend on a number of factors. The Ministry of Finance will provide support to the Atal Pension Yojana.
What Benefits you will Get under Atal Pension Yojana?
- Every contributor will surely get pension. Also, they will get a fixed amount of pension.
- The amount received in form of pension per month can reach up to Rs. 5000.
- It is like a good form of investment for the middle class.
- It will inculcate a habit of saving to the poor people in the society.
- The government will contribute either Rs. 1000/- or a sum of 50% of the contribution of the subscriber. It will depend on which is lower and the government will pay the lower one.
- This scheme is especially beneficial for those who do not have any financial cover.
- You will also get tax benefits for enrolling under the Atal Pension yojana. All the amount paid for Atal Pension Yojana contribution will exempt from tax under section 80CCD.
How can you apply for Atal Pension Yojana?
- The nationalized banks provide this scheme. So, you can locate the nearest bank branch and go there.
- Ask for the Atal Pension Yojana form. You can also download the form online. One good thing about the Atal Pension Yojana forms are that they are available in various languages. So, you have the option to fill form in Hindi, English or even regional languages.
- Fill up the form and attach a copy of ID proof.
- Submit it to the bank.
- Keep in mind to provide a valid phone number because they will send a confirmation about your application on your number.
Who is Eligible for the Atal Pension Yojana?
One drawback of the scheme is that not everyone will be able to enjoy the benefits of the yojana. People who are members of some other social security system will not come under Atal Pension Yojana. Some other eligibility criteria include the following.
- Every subscriber needs to have a valid bank account.
- Aadhar card is important to apply for Atal Pension Yojana. You can later on link it to bank account.
- Minimum age of the subscriber can be 18 years and the maximum age can be 40 years.
- The subscriber needs to contribute for at least 20 years to get the benefits of the scheme.
- A working phone number is important. And the bank should have your updated phone number.
What if a subscriber chooses to close an account before the age of 60?
The subscriber can choose to close the Atal Pension account before reaching the age of 60. However, in that case, the subscriber will receive whatever contribution he/she has made along with interest. A disadvantage in this case is that the government contribution will become void and he/she will not receiver that.
- You will need to write an application to the bank to close your account.
- The bank will then process the request and refund the savings. The interest that you might have accumulated will also be refunded.
- Depending upon your particular case, you may have to pay a penalty for this.
Two other government schemes are launched for the encouragement of poor people. The Pradhan Mantri Jeevan Jyoti Bima Yojana is quite popular. And one more scheme is the Pradhan Mantri Suraksha Bima Yojana.
What will be the Government Contribution?
Co-contribution by the government is the major benefit of the Atal Pension Yojana. If a person joins the scheme between 1 Jun 2015 and 31 Dec 2015, the government will contribute for 5 years. This means that the contribution will be made only till the financial year 2019-2020. The amount of the contribution by government will be the lower one of the two – 50% of the subscriber’s contribution and Rs. 1000/-.
What will happen if the Subscriber Dies?
In case the pensioner dies, the government will not withdraw his/her pension. Instead, the spouse of the deceased will receive the pension. And, if the spouse also dies, the children will get the pension.
Key Points about Atal Pension Yojana
- You can choose the option of auto-debit. With this feature, the bank will automatically deduct the contribution money from your account.
- So, you need to make sure that your account always has enough money.
- It is possible to increase or decrease the amount of contribution any time. You will need to go the bank to request for the same.
- You can also decide the frequency cycle of paying the premium. By default, it will be monthly. You can change it quarterly or bi-annually.
- You will have to pay a minimal fine if the delay the payment of premium. It will be as low as Re. 1/- for every Rs. 100/-. And you will have to pay only for the month for which the delay in payment occured.
- One thing to keep in mind is that the pension that the subscriber will receive once he turns 60 will not be tax-free. So, you can expect some tax to be deducted from the amount payable to you.
- This yojana is applicable only to the people living in India. If you are an NRI, you cannot take advantage of Atal Pension Yojana.
What is the Progress of the Atal Pension Yojana?
So far, as many as 20 lakh Indians have signed up for the scheme. The unorganized sector workers such as fishermen and laborers make a big part of this population. And, as per the banks, up to 328 crore collection has been already made. And, it is continuing to grow.
You can also become a part of this scheme. This will surely free you of any tensions after retirement. If you have any queries regarding the scheme, let us know. Post a comment below and share your opinion.