Atal Pension Yojana Maturity Benefits Explained
Table of Contents
The Atal Pension Yojana is a pension scheme that aims to provide pension benefits to the informal sector of India, which employs a significant number of individuals. This scheme superseded the Swavalamban Yojana, which had few applicants since it did not guarantee pension payments at the age of 60. The purpose of the Atal Pension Yojana is to provide social security to the senior citizen, particularly the poor and vulnerable.
The Atal Pension Yojana is constructed in a straightforward manner, making it simple to grasp for anyone interested in opening an account under the plan. Individuals who wish to open accounts under the initiative can do so at any of the major banks. The system is based on the depositor's contributions up to the age of 60. The Pension Fund Regulatory and Development Authority oversees the system (PFRDA). To know more about Atal Pension Yojana, read on.
Atal Pension Yojana Eligibility
Following are the criteria for Atal Pension Yojana -
- An individual should have a savings account linked to an Aadhaar card number and a registered mobile number.
- An individual should be between the ages of 18 and 40.
- An individual should make a minimum contribution for at least 20 years.
Benefits Of Atal Pension Yojana
Following are some of the benefits of Atal Pension Yojana -
1. Death Benefits
The spouse of the contributor receives the Atal Pension Yojana death benefits. When a contributor dies, the pension is immediately transferred to the spouse who is the default nominee. The nominee will receive the predefined fund amount for the relevant pension slab in the case of the contributor's and spouse's deaths. If a contributor dies before reaching the age of 60, their respective spouse has the choice of continuing the Atal Pension Yojana account and receiving benefits, or closing the account and receiving the contributions and gains earned on it.
2. Retirement Benefits
The Atal Pension Yojana's most essential feature is the retirement benefit. The monthly pension will be handed out based on the payments made. There are five distinct pension amounts: 1,000, 2,000, 3,000, 4,000, and 5,000 rupees. These pensions have varying contribution levels. The pension is provided to the spouse in the event of the subscriber's death.
3. Tax Benefits
The government is providing tax incentives on donations to the Atal Pension Yojana to encourage individuals to engage in the plan. Over and beyond the Rs. 1.5 lakhs, the Atal Pension Yojana tax advantages can be claimed under Section 80CCD (1B) to the tune of Rs. 50,000. As a result, the respective individual's taxable income will be lowered.
4. Contribution
As previously stated, an individual is entitled to receive an Atal Pension Yojana pension after one reaches the age of 60. The amount of an individual’s pension is determined by how much they contribute to this plan. Various contributions affect the amount of a pension. As a result, they may elect to make bigger payments in order to receive a larger pension later. The Indian government permits the amount of funds to be changed by raising or lowering the contribution facility.
5. Automatic Debit
The automatic deduction function is one of the greatest aspects of the Atal Pension Yojana. As a plan beneficiary, an individual can link their bank account to their Atal Pension Yojana account, and an individual’s monthly payment will be deducted straight from their account. The account individuals link to their APY account must have a sufficient balance to prevent automatic deduction from occurring, which might result in a penalty.
6. Withdrawal
When an individual reaches the age of 60 as a beneficiary of the APY plan, they are able to annuitize the entire fund amount, which means they can get a monthly pension when the arrangement with their particular bank has ended. It's worth noting that an individual can only leave the plan before 60 years if they have a terminal disease or die. The spouse is entitled to the pension if the respective individual dies before reaching the age of 60. In this scenario, the spouse can choose between receiving pension benefits or departing the APY with the funds accumulated. If an individual opt to leave the Atal Pension Yojana before reaching the age of 60, they will only get their respective cumulative contributions and earned interest.
Endnotes
The Atal Pension Yojana, which is funded by the Indian government, is administered by the Pension Fund Regulatory and Development Authority (PFRDA). The National Pension System's institutional architecture for enrolling new endorsers is the APY scheme. PFRDA creates the account registration form and offer document for the Atal Pension Yojana scheme.
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Disclaimer: This article is issued in the general public interest and meant for general information purposes only. Readers are advised not to rely on the contents of the article as conclusive in nature and should research further or consult an expert in this regard.
