INSUBCONTINENT EXCLUSIVE:
Atal Pension Yojana (APY): Individuals aged between 18 and 40 years can invest in the pension schemeAPY or Atal Pension Yojana is a pension
scheme focused on the unorganised sector in the country
Introduced in 2015, the Atal pension scheme allows individuals aged from 18 to 40 years of age to make pre-defined monthly investments in
the scheme, and offers a pension benefit in multiples of Rs 1,000 up to Rs 5,000 per month, according to pension fund regulator PFRDA's
The amount of monthly contribution depends on two factors: (i) the age of investor at the time of joining the pension scheme and (ii) the
fixed pension slab chosen (Rs 1,000 per month, Rs 2,000 per month, Rs 3,000 per month, Rs 4,000 per month or Rs 5,000 per month)
The Atal pension scheme, therefore, requires a minimum contribution period of 20 years by the investor. ( How to make most of Atal Pension
Yojana)The government is considering a proposal to increase the pension limit under Atal Pension Yojana (APY) to up to Rs 10,000 per month,
news agency Press Trust of India had reported last month citing a top government official.1
What is the age requirement to be eligible to invest in the Atal pension scheme The minimum age to invest in Atal Pension Yojana is 18
years and the maximum age is 40 years, according to PFRDA
The pension starts once the investor attains the age of 60 years.2
What is the minimum amount of investment required for the Atal pension schemeOne can invest in the Atal pension scheme through three modes
of payment: monthly, quarterly and half-yearly
That means the pension scheme requires the investor to make a minimum of two contributions every year
Subscribing to the Atal pension scheme at an early age minimises the contribution required to reach the desired minimum monthly pension,
maximising the pension benefit, say experts
For instance, an investor subscribing for the Atal scheme at the age of 18 years is required to pay Rs 42 per month to reach a pension goal
1,000 per month.3.How to subscribe to or exit from the Atal pension schemeOpening an Atal Pension Yojana account requires the applicant to
hold a savings account either with a bank or a post office. Atal pension schemesubscribers are allowed premature exit before the age of 60
years "only in exceptional circumstances, i.e., in the event of the death/ terminal disease", according to the PFRDA website. (Read more)4
How much maximum pension can be earned through the Atal pension schemeCurrently, the Atal pension scheme offers five fixed, pre-defined
pension slabs: Rs 1,000, Rs 2,000, Rs 3,000, Rs 4,000 and Rs 5,000
The earlier one starts, the lower is the monthly contribution required to reach the desired pension goal, say experts. For instance, a
subscriber at the age of 18 will contribute Rs 210 per month for 42 years to earn a pension of Rs 5,000 per month after maturity of the
That means a total investment of Rs
That is lower than investment worth Rs 3,48,960 required by an individual who enters the scheme at 40 years of age for the same pension
The 40-year-old investor is required to contribute Rs
1,454 per month for a period of 20 years for the pension goal of Rs 5,000 per month.(Using a chart, pension regulator PFRDA explains the
contribution levels vis-a-vis minimum fixed monthly pension in the Atal pension scheme)5
What are the income tax benefits one can claim by investing in the Atal pension schemeContributions paid in Atal Pension Yojana can be
claimed for income tax deduction up to Rs
50,000 under Section 80CCD (1B) of the Income Tax Act, over and above the Rs
1.5 lakh per financial year allowed under Section 80C.
