What is Atal Pension Yojana (APY)?
Last year, Government of India announced a new scheme called as “Atal Pension Yojana (APY)”. The scheme is administered by Pension Fund Regulatory and Development Authority (PFRDA) of India. This guaranteed pension scheme focuses on creating a retirement corpus for people from unorganized sector of India.
Who can join this scheme?
Any Indian citizen of age between 18 to 40 years can join this scheme by opening an APY account in bank.
Following are the requirements for opening APY account-
- Person should have a savings bank account. If he is not having an account, he is required to open his savings account before opting for the scheme.
- Person should have mobile number and he is required to provide it as contact details to concerned bank.
- Person should also provide the details of his nominee for APY account.
One person can open only 1 APY account.
How much will be the contribution?
Investor may contribute any sum ranging from Rs. 100/- to Rs. 5,000/- per month. As per this scheme, contribution is directly debited from the savings bank account of an Investor and hence there is no need to deposit such contribution in cash or by cheque.
Further savings bank account should have sufficient balance at the start of every month so that contribution could be made automatically to APY Account. If the account is not having sufficient balance, investor may get penalized.
What is co-contribution by Government?
Government will also co-contribute to this scheme for 5 years i.e. from financial year 2015-16 to 2019-20.
Conditions for co-contribution by Government-
Co-contribution is available to investors
- Who have joined the scheme upto 31st March, 2016 and
- Who are not Income-tax payers and
- Who are not covered by any other social security scheme like provident fund, public provident fund etc.
Amount of contribution shall be actual contribution of investor or Rs. 1,000/- per annum, whichever is lower.
What is the tax treatment of this scheme?
As per the recent notification from Department of Revenue, with effect from 19th February, 2016, if a taxpayer invests any sum in Atal Pension Yojana, he can claim the benefit U/s. 80CCD of the Income Tax Act, 1961.
What is the amount of pension?
The scheme pays guaranteed minimum pension starting from Rs. 1,000/- to Rs. 5,000/- per month to the investor or his nominee depending on the contribution after he attains age of 60 years.