Aimed at offering social security to people working in the unorganised sector, the Government of India announced the introduction of the Atal Pension Scheme (APY) in the Union Budget 2015. Earlier known as Swavalamban Yojana, the Atal Pension Scheme guarantees a steady income for individuals after their retirement age i.e. 60 years, based on regular contributions from the subscribers and the Government. The beneficiaries of the APY scheme are mainly workers in the unorganised sector such as domestic maids, street vendors, rickshaw pullers, drivers, gardeners,labourers, etc. The scheme, however, is open to employees working in the private sector or any organisation where they are deprived of pension benefits. Under APY, the pension pay-outs are available under five slabs namely Rs 1000, Rs 2000, Rs 3000, Rs 4000, or Rs 5000.
How to Apply For Atal Pension Yojana
A set of simple steps, as explained below, must be followed when applying for the Atal Pension Yojana.
- The APY scheme is offered by all the nationalised banks. Individuals availing the scheme can open an APY account by visiting any of these banks.
- Individuals must download the online application form which is available on the official website of these banks.
- Based on one’s language preference, individuals can also select the form which is available in English, Hindi, Tamil, Telugu, Kannada, Marathi, Gujarati and Bangla.
- Once the form is downloaded, individuals should duly fill in the relevant details, sign the form and submit it to the bank for further processing.
- In case, the applicant has not provided their valid mobile number to the bank, they must furnish the number at the time of application.
- As an identity proof, applicants of the Atal Pension Scheme are also required to provide the bank with a copy of their Aadhaar card.
After the applicants submit their forms, they should await a confirmation message which they will receive if their application has been processed and approved successfully.
Requirements To Apply For Atal Pension Yojana
In order to avail the Atal Pension Scheme, individuals must fulfil certain eligibility criteria which are mentioned as under:
- The applicants of Atal Pension Scheme should be citizen of India.
- They should be aged between 18 and 40 years.
- The contributions made under the scheme should be done for a minimum period of 20 years.
- Applicants should have a valid mobile phone number.
- Applicants must have a valid bank account number which must be linked with their Aadhaar number.
- They are required to submit their complete ‘Know Your Customer’ (KYC) details.
- They should not have an already existing account under Atal Pension Scheme.
Important Facts To Know About APY
Given below are some facts that will be helpful for individuals who are applying for The Atal Pension Yojana Scheme:
- As per the scheme, the government will also co-contribute about 50% of the total contribution, or Rs. 1,000 per annum, whichever is lower, to all eligible subscribers who had joined during June 2015 and December 2015 for a period of 5 years.
- The contributions can be made on monthly, quarterly, or half-yearly basis which would be auto-debited from the subscriber’s bank account. Hence, sufficient balance must be maintained in the bank account.
- The subscribers can choose to increase their premium and must intimate their bank for the same.
- To avail the government’s co-contribution, subscribers must not be part of any other statutory social security schemes like EPF or must not be paying income taxes. Also, they must not close the scheme before age 60.
- The APY scheme offer tax benefits of up to Rs. 1,50,000 under Section 80C of the income tax act and additional tax deductions of up to Rs. 50,000 per year under Section 80CCD (1B).
Charges Levied in Case Of Defaults
In case the subscribers delay making payments, penalty charges will be levied on them on a monthly basis as explained below:
- If the per month contributions made by the subscriber are up to Rs. 100, a penalty of Re. 1 is applicable
- If the per month contributions made by the subscriber ranges between Rs.101 and Rs.500, then a penalty of Rs. 2 is charged from the subscriber.
- If the per month contributions made by the subscriber ranges betweenRs.500 and Rs.1,000, in such an event a penalty of Rs. 5 will be levied upon the subscriber.
- If the per month contributions made by the subscriber is above Rs. 1,001, in such an event the subscriber is liable to pay a penalty of Rs.10.
Based on the pension amount, the penalty charges under this scheme will be a fixed amount. In case of stoppage in payments, the following points are applicable.
- The account will be frozen if no payments are made for 6 months
- The account will be deactivated if no payments are made for 12 months
- The accountwill be closed if no payments are made for 24 months
Procedure To Exit From The Scheme
A subscriber can exit from the Atal Pension Scheme under different scenarios which have been clearly explained below:
- When subscriber reaches the threshold age of 60 years: On attaining the age of 60, the account holder under the Atal Pension Scheme is entitled to exit from the scheme with complete annuitisation of the pension corpus. The pension will be available after the subscriberexits.
- On the death of the subscriber: If the subscriber passes away, the pension will be paid to the subscriber’s spouse. If the spouse also passes away, the amount will be paid to the nominee.
- If subscriber exits before reaching 60 years of age: Although, subscribers under Atal Pension Scheme are not allowed to exit before they attain 60 years of age. But, in case of death or terminal disease of the beneficiary, an early exit is allowed.
FAQs on Atal Pension Yojana
1. Can I open an online account under Atal Pension Yojana?
No, there is no provision under Atal Pension Yojana to open an online account. Applicants are required to visit their bank and submit the application form.
2. What are the essential documents for opening APY account?
For opening an APY account, applicants are required to submit an application form along with a photocopy of their Aadhaar card which serves as the primary KYC document to identify beneficiaries, nominees and subscriber’s spouse.
3. Is it possible to open an APY account without a savings account in the bank?
No, it is mandatory for applicants to hold a valid savings account number in their bank in order to open an APY account.
4. Is there a last date to join the Atal Pension Yojana Scheme?
There is no last date to join the scheme. However, applicants can submit their forms before June 1st to subscribe in the scheme for the coming year. The Atal Pension Yojana Scheme is renewed on June 1st each year.
5. Is there a due date to make monthly contribution?
There is a due date to make monthly contribution under the APY account and it is decided based on the first deposit date.
6. Are members of the Employees Provident Fund (EPF) eligible to enrol for APY?
Yes, individuals who have subscribed to the Employees Provident Fund (EPF) can enrol for APY scheme.
7. Can subscribers change their monthly contribution amounts?
Yes, subscribers are allowed to increase or decrease their monthly contribution amounts. It can be done once a year during April.
8. Can a subscriber continue to contribute if he/she becomes an NRI?
As the scheme is only available for Indian citizens, the APY subscriber’s account will be closed once he/she becomes an NRI. The accrued contribution amount will be paid to him/her and it will be considered as a voluntary exit before age 60.