Atal Pension Yojana (APY) | APY Scheme Details & Eligibility

Atal Pension Yojana is a pension scheme introduced by the Government of India in 2015–16. It was implemented with an objective to provide pension benefits to individuals in the unorganised sector. This scheme is regulated and controlled by the Pension Funds Regulatory Authority of India (PFRDA).


Nevertheless, individuals employed in the organised sector with no recourse to pension benefits can also invest in the Atal Pension Scheme to secure a source of income for their old age.


It is an extension of the recognised National Pension Scheme and replaces the previously institutionalised Swavalamban Pension Yojana which was poorly received by the general population. All accounts that were opened in the first year of the scheme, i.e. in 2015, were eligible for co-contributions from the Indian government for 5 years.

This pension scheme is targeted to mitigate the basic financial obligations of individuals that crop up in their retirement phase by encouraging savings from an early age. The amount of pension which an individual shall receive is directly dependent on the monthly contributions they decide to make and their age.

Beneficiaries of Atal Pension Yojana (APY) shall receive their accumulated corpus in the form of monthly payments. In the event of a beneficiary’s death, his/her spouse shall continue to receive pension benefits; and in case both such individuals are deceased, the beneficiary’s nominee shall receive the amount in a lump sum.


Features of Atal Pension Yojana

The features of APY scheme are discussed below –

Automatic debit :
One of the primary conveniences of the Atal Pension Yojana is the facility of automatic debit. The bank account of a beneficiary is linked with his/her pension accounts and the monthly contributions are directly debited. On that account, individuals who have subscribed to this scheme shall ensure that their account has sufficient finances to entertain such automatic debit, failing which shall attract a penalty.

Facility to increase contributions :
As mentioned earlier, the pension amount one is eligible to receive upon reaching the age of 60 is determined by their contributions. There are different contributions which tantamount to different pension amounts.

And, it might be so that individuals decide to make larger contributions to their pension account backed by an increased financial capacity to secure a higher pension amount later in the course of the scheme. To facilitate this requirement, the government provides an opportunity to increase and even decrease one’s contributions once a year to change the corpus amount.
Guaranteed pension :
Beneficiaries of the scheme can choose to receive a periodic pension of Rs. 1000, Rs. 2000, Rs. 3000, Rs. 4000, or Rs. 5000, depending on their monthly contributions.



Age restrictions :
Individuals who are above 18 years and below 40 years of age can decide to invest in the Atal Pension Yojana. Therefore, college students can also invest in this scheme to create a corpus for their old age. 40 years has been set as the maximum bar for entry into the programme, as contributions to this scheme shall be made for at least 20 years.
Withdrawal policies
If a beneficiary has attained the age of 60, he/she shall be eligible to annuitise the entire corpus amount, i.e. receive monthly pensions after closing the scheme with the respective bank.

One can only exit this scheme before reaching the age of 60 under circumstances like terminal illness or death.

In the case of a beneficiary’s death before he/she reaches 60 years of age, his/her spouse shall be entitled to receive a pension. As such, the spouse has an option to either exit the scheme with the corpus or continue to receive pension benefits.

However, if individuals choose to exit the scheme before they reach 60 years of age, they shall only be refunded their cumulative contributions and interest earned thereon.
Terms of penalty :
If beneficiary delays in the payment of contributions, the following penalty charges are applicable –
  • Re. 1 for monthly contributions of up to Rs. 100.
  • Rs. 2 for monthly contributions within Rs. 101 and Rs. 500.
  • Rs.5 for monthly contributions within Rs. 501 and Rs. 1000.
  • Rs.10 for monthly contributions of Rs. 1001 and above.

In the case of continued default in payment for 6 consecutive months, such account shall be frozen and if such default continues for 12 consecutive months, that account shall be deactivated and the amount thus accumulated along with interest would be returned to the respective individual.



Tax exemptions :
Tax exemption is available on contributions made by individuals towards Atal Pension Yojana under Section 80CCD of the Income Tax Act, 1961. Under Section 80CCD (1), the maximum exemption allowed is 10% of the concerned individual’s gross total income up to a limit of Rs. 1,50,000. An additional exemption of Rs. 50,000 for contributions to the Atal Pension Yojana Scheme is allowed under the Section 80CCD (1B).

Regardless, it is advisable to consult a professional for these exemptions as such tax benefits can be availed based on specific provisions stated in the Income Tax Act.


Benefits of Aral pensioen yojana !
The Atal Pension Yojana benefits are enumerated below –
Source of income in old age

Individuals are provided with a steady source of income after they reach 60 years, thus financially enabling them to meet basic requirements such as medications, which is fairly common in old age.


Government-backed pension scheme :
This pension scheme is backed by the Indian government and regulated by Pension Funds Regulatory Authority of India (PFRDA). Hence, individuals carry no risk of loss as the government assures their pension.

Enabling the unorganised sector :
The scheme was launched primarily with the motive to alleviate the financial worries of individuals who are employed in the unorganised sector, thus enabling them to be financially independent in their later years.

Nominee facility :
In case of a beneficiary’s death, his/her spouse becomes entitled to the benefits of this scheme. They can either terminate their account and avail the entire corpus in a lump sum or choose to receive the same pension amount as the original beneficiary. In case of death of both the beneficiary and his/her spouse, a nominee shall be entitled to receive the entire corpus amount.
Who can invest in the Atal Pension Scheme?
To be able to invest in the Atal Pension Yojana and receive a pension from there, individuals need to satisfy the following requirements –
  1. Must be an Indian citizen.
  2. Should possess an active mobile number.
  3. Must contribute to the scheme for a minimum of 20 years.
  4. Should be within the age bracket of 18 years and 40 years.
  5. Must hold a bank account linked with his/her Aadhaar.
  6. Shall not be a beneficiary of any other social welfare scheme.
Other than that, individuals who have been beneficiaries under the Swavalamban Scheme are automatically eligible and thus migrated to this scheme.

How to apply for Atal Pension Yojana?
All banks in India are empowered to initiate the opening of a pension account under the Atal Pension Yojana. The descriptive steps to apply for APY are –
  1. Visit the nearest branch of the bank where you have an account.
  2. Duly fill out the application form with required details.
  3. Submit it along with two photocopies of your Aadhaar card.
  4. Provide your active mobile number.
One can also download the application form from the official website of a bank and then continue with the steps mentioned above.