Atal Pension Yojana aka APY is one of the most popular pension investment instrument among Indians. APY is a scheme which is aimed at providing financial security to people working in the unorganised sector such as delivery boys,
maids, delivery boys, etc.
maids, delivery boys, etc.
This social security scheme was launched to provide them with a defined pension between Rs 1,000 to Rs 5,000, depending on the contribution and its period. With this scheme, investment of just Rs 42 can help the subscriber earn a fixed monthly pension of Rs 1,000 and investment of Rs 210 per month guarantees fixed yearly pension of Rs 60,000.
This scheme is secure as it is administered by the Pension Fund Regulatory and Development Authority (PFRDA). Under this scheme, an individual is guaranteed regular fixed monthly pension after their retirement age. Any Indian citizen from the age of 18 years to 40 years us eligible to join this scheme. One can make their Atal pension scheme contribution through three modes of payment: monthly, quarterly and half-yearly.
In order to get a fixed monthly pension between Rs 1,000 and Rs 5,000 a month, the subscriber has to contribute between Rs 42 and Rs 210 per month if they are joining at the age of 18 years. On the other hand, if the subscriber joins at the age of 40 years, then the contribution ranges between Rs 291 and Rs 1,454 per month, for the same fixed pension levels. You can decide you atal pension yojana contribution depending upon your desired
Know that you will get more benefits if you join at a young age. Suppose if you join at the age of 35 for a monthly pension amount of Rs 5,000, then you will have to deposit Rs 5,323 every 6 months for 25 years. In this case, your total investment will be Rs 2.66 lakh and you will get a monthly pension of Rs 5,000. However, if you join at the age of 18, your total investment will be only Rs 1.04 lakh rupees. This means that if you join late, about Rs 1.60 lakh rupees more will have to be invested for the same pension amount.
It must be noted that if a person is joining APY at the age of 40, then in order to avail the pension they still need to pay a premium for a minimum of 20 years. You can easily calculate your contribution and pension amount using any of the atal pension yojana calculator available
According to PFRDA website, "The Central Government would also co-contribute 50 per cent of the total contribution or Rs 1,000 per annum, whichever is lower, to each eligible subscriber account, for a period of 5 years, i.e., from Financial Year 2015-16 to 2019-20, who join the APY between the period 1st June, 2015 and 31st December, 2015 and who are not members of any statutory social security scheme and who are not income taxpayers.
It is worth mentioning that APY also offers tax benefits to subscribers. One can get a tax benefit under Section 80CCD of the Income Tax Act, for contributions made under this scheme. The maximum amount that can be deducted from taxable income under this scheme is Rs 2 lakh in the financial year. Also, the combined deduction under Section 80C and Section 80CCD cannot exceed Rs 2 lakh.
