Business

Atal Pension Yojana (APY): Here's all you need to know

Updated : November 23, 2018 04:12 PM IST

Any contribution that is made in to the scheme will be eligible for income tax benefits like National Pension System.

It is a guaranteed pension scheme for Indians that focus primarily on the people working in the unorganised sector.

The Pension Fund Regulatory Development Authority (PFRDA) is mulling the idea of increasing the pension limit under Atal Pension Yojana (APY) to Rs 10,000. If the decision becomes a reality, then it will be a big boon to Indians working in the unorganised sector.

What is Atal Pension Yojana

Launched in May 2015, the plan has over a crore subscribers in the country. It is a guaranteed pension scheme for Indians that focus primarily on the people working in the unorganised sector. Currently, the pension provided through the scheme is limited to Rs 5,000 per month and this could soon change.

While it's mandatory that those who enter the scheme should belong to 18-40 age category, they will start benefiting from the scheme after turning 60. There is also the option of leaving the scheme before the age of 60 in circumstances such as death of the beneficiary or terminal illness.

The contribution to the scheme can be made monthly/quarterly/half yearly basis. In case of death of the person, the spouse will receive the pension and on the death of both, the pension corpus will be returned to the nominee.

Key Features

Any contribution that is made in to the scheme will be eligible for income tax benefits like the National Pension System. This, in other words mean that investment of up to Rs 1.5 lakh made to the scheme qualifies for income tax deduction.

In addition, those who join the scheme do not need to worry about economic fluctuations as the government has guaranteed the minimum pension amount even if there is a short fall in returns from the investment. On the other hand if the returns exceeds the target, the excess amount will credited to the investor.

In the end, we can say that while day to day life and the near future may be in mind of most when it comes to investment, planning for the long run is also very essential. Particularly with rising life expectancy, a thorough retirement plan is imperative for anyone who wants secure his future. With its eye catchy benefits, the Atal Pension Yojana is scheme to take notice of.

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Atal Pension Yojana (APY): Here's all you need to know

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