An individual can make monthly, quarterly or half-yearly contributions to the scheme.(Representational)
The pension provides significant financial support during the retirement period and helps meet expenses in old age. Making small contributions to social security schemes like the government's Atal Pension Yojana (APY) can provide you with a steady income once you are longer working. A pensioner can earn up to Rs 5,000 per month by subscribing to the Atal Pension Yojana (APY).
Who can subscribe to Atal Pension Yojana?
Any citizen who is aged between 18 and 40 years can subscribe to APY. It is mandatory for the individual to have a KYC-compliant savings bank account or post office savings bank account. From October 2022, the government made income taxpayers ineligible for the Atal Pension Yojana. It means that if you have or have been paying income tax, then you can join the scheme.
Contribution and pension
Under the Atal Pension Scheme, the subscriber receives a guaranteed monthly pension of Rs 1,000, Rs 2,000, Rs 3,000 Rs 4,000 or Rs 5,000 from the age of 60. The pension amount depends upon the contribution made and the year of joining the scheme.
The central government also contributes 50% of the subscriber's contribution to the scheme or Rs 1,000, whichever is lower, for a period of five years. It must be noted that the government's co-contribution is not available to income taxpayers and to those who are covered under any statutory social security scheme.
An individual can make monthly, quarterly or half-yearly contributions to the scheme.
If you join the APY at the age of 18, then you will have to contribute Rs 42 every month to get a guaranteed pension of Rs 1,000 and Rs 210 per month to get a pension of Rs 5,000. A subscriber can also contribute Rs 626 on a quarterly basis or Rs 1,239 on a half-yearly basis after joining the scheme at the age of 18 to draw Rs 5,000 monthly pension after attaining the age of 60. The return of pension amount to the nominee, in this case, is Rs 8.5 lakh.
If the subscriber chooses to join the scheme at the age of 39, then he/she will have to contribute Rs 1,318 monthly, Rs 3,928 quarterly or Rs 7,778 half-yearly to get Rs 5,000 monthly pension.
Other features
The monthly pension under APY is available to the subscriber and to his spouse after his death. The pension corpus accumulated at the age of 60 is returned to the nominee after the death of the subscriber and his spouse. If a subscriber dies before attaining the age of 60, then his spouse can continue the contribution in the same APY account. One can also choose to opt out of the scheme. In this case, only contributions made by the subscriber will be refunded along with the net actual income earned on his contributions after deduction of account maintenance charges.