In June 2015, the Government launched Atal Pension Yojana, this scheme is administered and regulated by Pension Fund Regulatory and Development Authority (PFRDA) of India. This pension scheme is for the people working for unorganized sectors.
Who are eligible for this scheme?
Any citizen of India between the age of 18 to 40 years can join this scheme by opening an APY account in a bank.
You will require following things to open an APY account-
- The individual should have a savings bank account. If he/she doesn’t have an account, he/she is required to open his/her savings account before opting for the scheme.
- The individual should have a mobile number and he/she is required to provide it as contact details to concerned bank.
- The individual should also provide the details of his/her nominee for APY account.
One person can have only one APY account.
What should be the contribution to this account?
An individual can contribute from Rs. 100 to Rs. 5000, per month. According to this scheme, the contribution is directly debited from the savings bank account of the individual and that’s why an individual is not required to deposit such contributions either in cash or by cheque.
Your savings account should have sufficient balance so that the amount of APY can get deducted automatically. If the account doesn’t have sufficient balance, then the investor can get penalized.
How is the Government contributing to APY?
The government also co-contributes to Atal Pension Yojana for 5years i.e. from the financial year 2015-16 to 2019-20.
Contributions that are available to the investor, by the government are as follows: -
- The investors who joined the scheme up to 31st March 2016
- The investors who are not income taxpayers
- The investors who are not covered by any other social security scheme like provident fund, public provident fund etc.
Amount of contribution can be the actual contribution of the investor or Rs. 1000 per annum, whichever is less.
How can you claim deductions under this scheme?
According to the recent notification from the Revenue Department, with effect from 19th February 2016, if a taxpayer invests any sum in APY, then he/she can claim deductions under section 80CCD of the Income Tax Act, 1961.
What will be the amount of pension?
As per this scheme, the investor or his/her nominee will get the minimum pension of Rs.1000 to Rs.5000 per month to the investor of his nominee depending on the contribution after he/she attains the age of 60 years.
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