The Government of India launched the Atal Pension Yojana in 2015 to provide financial support in old age to those in the unorganized sector, private jobs, or low-income groups. The objective of this scheme is to enable individuals to earn a fixed monthly pension after the age of 60 by saving a small amount during their working life. The pension amount under this scheme ranges from ₹1,000 to ₹5,000 per month, depending on the individual’s contribution and the option chosen.
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The government guarantees a minimum pension under this scheme. If the actual return on investment falls short of the projected target, the government compensates for the shortfall.
Main Objective and Need of the Scheme
As age increases, earning capacity decreases, and expenses increase. In such a situation, regular pension income helps individuals remain financially independent. In an era of rising life expectancy and inflation, this scheme is considered an important social security option.
Eligibility Criteria for the Atal Pension Yojana
To join this scheme, a person must be an Indian citizen. The age limit for joining the scheme is set between 18 and 40 years. Additionally, a person must have a savings account with a bank or post office, as contributions are deducted directly from the account.
Who Cannot Benefit from the Atal Pension Yojana?
People Outside the Age Limit
If a person is under 18 or over 40 years of age, they cannot join the scheme. The scheme is structured to allow for a minimum investment period of 20 years.
Income Tax Payers
The rules have changed effective October 1, 2022. Those who pay income tax or have previously paid tax cannot open new APY accounts. This rule was implemented to prioritize lower-income groups.
Those Who Don’t Have a Bank Account
The scheme is entirely bank-based. Both contributions and pensions are made through a bank account. Therefore, having a savings account is mandatory.
Those who are not Indian citizens
This scheme is only for Indian citizens. If someone later renounces citizenship, their account can be closed, and the deposited amount is returned as per the rules.
Benefits of the Atal Pension Yojana
Investing in this scheme provides a fixed pension after the age of 60. Five pension options are available, including ₹1,000, ₹2,000, ₹3,000, ₹4,000, and ₹5,000 per month.
A major advantage of the scheme is that after the member’s death, the spouse continues to receive the pension, and the accumulated corpus is subsequently transferred to the nominee.
How the Investment Amount is Determined
Contributions to this scheme depend on the individual’s age and the chosen pension amount. Joining the scheme at a younger age results in a lower contribution, while joining at an older age results in a higher monthly investment.
Join the scheme at the right time
Starting investments at a younger age requires a smaller deposit and reaps the benefits of investing over a longer period. This makes it easier to ensure a stable income after retirement.
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Rohit P
My name is Rohit Pal, and I have been working in the field of journalism for the past five years. During this time, I have written on a variety of topics, including business, automobiles, technology, and politics. I have worked with several major organizations and am currently working with Timesbull.
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