Five New Features of Atal Pension Yojna

Tue, 19 Oct 2021 06:39:17 +0000

The Buyt Desk

The Atal Pension Yojna(APY) is a social security scheme run by the Government of India. The Pension Fund Regulatory and Development Authority(PFRDA) regulates this scheme. The purpose of APY is to ensure a guaranteed pension to people who are working in the unorganised sector. Under the Atal Pension Yojana (APY), more than 28 lakh new APY accounts have been opened during FY 2021-22. Overall, enrolments under APY have crossed 3.30 crore as of 25th August 2021. The Government of India wants more and more people to enrol in APY so that they can have dignified life after they stop working. The government has made few changes in this scheme to make it more flexible and adaptable. Before we talk about the new changes let us first understand the scheme.

How Do Atal Pension Yoojna works?

The unorganised workforce who are working in the private sector or are earning daily wages in professions like a driver, factory worker or waiter can benefit from APY. These people are not covered under any pension or retirement programme and have no investments to support them in their non-working phase of life. But Atal Pension Yojna enables them to invest as low as Rs 42 and safeguard their old age. A guaranteed pension of Rs 1000, 2000, 3000, 40000 or 5,000 can be earned by making a contribution for at least 20 years. The subscriber will get the pension after he/she turns 60 years of age. The enrollment age for APY is 18-40 years of age.

Premium Calculation

The amount of premium will depend upon two factors- the age of the subscriber and the guaranteed pension that he/she opts for. This can be illustrated with an example. A 25 years old individual who wants Rs.1000 as the monthly pension will have to pay a monthly premium of Rs.76 for 35 years. To get a pension of Rs.2000, he will have to pay Rs.151. But if he starts this scheme at the age of 35 then he will have to pay a premium of Rs 181 for a pension of Rs 1000 and payment tenure would be 25 years. But if he wants a pension of Rs 2000 then his monthly premium will rise to Rs 362.

5 New Features Of Atal Pension Yoojna

1. Upgrade and Downgrade of Premium and Pension

The subscribers are now allowed to modify the amount of premium once a year. They can either increase the premium and opt for a higher pension or on the contrary, can also decide to decrease the amount if their money flow is obstructed for some reason. This is allowed only once a year and a charge of Rs 50 will have to be paid by the subscriber for this modification.

2. PRAN Card

APY Subscriber can get a physical PRAN(Permanent Retirement Account Number) card by logging on to the eNPS portal. The NPS website has an instruction link that will guide them to print APY PRAN cards.

3. Continuation Process after the untimely death of the subscriber

In case of the death of the subscriber before completing the age of 60years his/her spouse can continue the contribution. The spouse will be issued a new PRAN and he/she can continue till the time the original/deceased subscriber attains the age of 60.

4. FATCA- Foreign Account Tax Compliance Act

Every new subscriber to APY will be filling an additional FATCA self-declaration at the time of registration. This is mandatory now for all the new registration.

5. APY App

APY App is available on the Google play store. The subscriber with smartphones can download the app and easily check their contribution details and transaction details

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What is Atal Pension Yojna(Apy)? Here is all You Need to Know About Apy

Thu, 24 Dec 2020 10:04:29 +0000

By The Buyt desk

The Atal Pension Yojna(APY) was launched by the Government of India in 2015. It is a guaranteed pension scheme for the people working in the unorganised sector. The aim is to provide a financial safety net to those who can’t afford it. The unorganised workforce like gardener, drivers, maids who are dependent on daily wages can take advantage of APY to fulfil their financial needs after their retirement.

Every individual wants to save for his/her old age. But those in the non-fixed income category may either not have many options to save and not a big saving to invest. For them, a government pension scheme APY offers its subscribers a pension in the range of Rs 1000 to Rs 5000 every month. The pension begins after the subscriber has achieved the age of 60 years. APY is administered by the Pension Regulatory and Development Authority(PFRDA).

Rules of Government contribution

The Government co-contributes for 5 years, i.e., if someone joined the scheme in June 2015, then the government will contribute from the Financial Year 2015-16 to 2019-20 for the subscribers. A mandatory condition is that the subscriber should not be covered by any Statutory Social Security Scheme such as he/she should not be a part of an EPF scheme and are not income taxpayers. The Government co-contribution is payable to eligible Permanent Retirement Account Number (PRANs) by the PFRDA after receiving the confirmation from Central Record Keeping Agency to the effect that the subscriber has paid all the instalments for the year. Government co-contribution will be credited in subscriber’s savings bank account/ post office savings bank account 50% of the total contribution subject to a maximum of Rs 1000/- at the end of the financial year.

Who can subscribe to the APY scheme?

All workers who are Indian citizens can approach any bank or post office and can open the pension account. Most of the banks offer the facility to open the account using their online portals.
The eligible age of the subscriber is 18 years to 40 years. Thus, the subscriber should pay the premium for a minimum of 20 years to build the corpus.
The subscriber should have a Savings account because APY is linked to a Savings account or Pradhan Mantri Jan Dhan Yojna Account. The subscriber can give instructions to deduct the premium amount from the Savings account.

Which documents are required?

Since the scheme aims to strengthen the economically weaker sections of our society, the account opening procedure is easy and hassle-free. The only document needed for Know Your Customer (KYC) documentation is the Aadhar Card (Aadhar ID Number) of beneficiaries, spouses or nominees. The subscriber can provide a copy of the ration card or the bank passbook as the address proof.

3 Steps to open APY account

Visit the bank branch/post office where the individual’s savings bank account exists or open a savings account if the subscriber doesn’t have one.
You have o fill the APY registration form
Provide Aadhaar/Mobile Number

Premium Amount

At the time of applying for the pension scheme, the subscriber has to decide about the pension amount that he wants to accrue at the time of retirement. It could be Rs.1000 and its multiples up to Rs.5000 per month. The amount of pension desired by the subscriber decides the premium amount. The subscriber can deposit it on a monthly, quarterly or half-yearly basis.

This can be illustrated with an example. A 25 years old individual has to pay the premium amount for 35 years. Now, if he wants Rs.1000 as the monthly pension, Rs.76 will be the monthly premium amount. Similarly, to get a pension of Rs.2000, he will have to pay Rs.151.

The amount to be obtained as pension can also be decreased or increased during the accumulation phase once a year in the month of April.

Penalty on default

In case, the subscriber is not able to pay the premium or there is a delay in the payment then a penalty may apply. The account will be frozen, deactivated, and closed if the default is for 6 months, 12 months, and 24 months respectively. There is a penalty of Re.1 per month for the contribution of every Rs.100, or part thereof, for each delayed monthly contribution.

Withdrawal Procedure

The subscriber, on attaining the age of 60 years, can approach the bank or post office and apply for disbursement of the pension. In case of death of the subscriber, the spouse (default nominee) will receive the same amount of pension. In case of death of both the subscriber and his/her spouse, the nominee receives the amount.

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