Atal Pension Yojana: How to open account, eligibility criteria, pension scheme payout — Check top FAQs answered here

The Pension Fund Regulatory and Development Authority's Atal Pension Yojana aims to provide pension cover for the poor, underprivileged, and unorganised sector workers. The government initiative seeks to create a universal social security system for all Indians under the broader National Pension System (NPS) umbrella.

Today we answer the most frequently asked questions about eligibility criteria, requirements, documents needed, payout amount and other top FAQs about the PFRDA-administered pension scheme.

Atal Pension Yojana: Key FAQs answered

How can I open an APY account? Approach the bank or post office branch where you have an Aadhaar-linked savings account to join APY. You can also open a new account and complete Aadhaar-KYC to gain access to the pension scheme. Notably, since APY replaced the erstwhile Swavalamban Yojana, all previous beneficiaries were automatically migrated to the new scheme.

Who is eligible to subscribe for APY? Any Indian citizen within the age group of 18-40 years, can join Atal Pension Yojana irrespective of their employment status or employer. Thus, an existing NPS subscriber can also subscribe to APY, if they meet the basic eligibility criteria. Similarly, a central or state government or Public Sector Undertaking (PSU) employee can also apply.

Are there any disqualifiers? You cannot enroll without Aadhaar or bank account. And since October 2022, Indians who pay income tax are deemed ineligible. APY is included under the Section 7 of the Aadhaar Act, which prescribes that individuals eligible to receive benefits such as pension from the scheme, are required to furnish proof of possession of Aadhaar or undergo Aadhaar enrolment. Further, a post office savings account or bank savings account is mandatory to join APY. Additionally, a minor cannot open an APY account.

How can I check status of my contributions? Subscribers will be periodically intimated about activation of PRAN, balance in the account, contribution credits etc. through SMS alerts on the registered mobile number. You can also access the details through the NSDL's APY app. Besides this, subscribers also receive a physical Statement of Account once a financial year at their registered address.

What is the pension payout amount? Subscribers will receive guaranteed minimum monthly pension payout of one of the following sums: ₹1,000, ₹2,000, ₹3,000, ₹4,000, or ₹5,000 after the age of 60 years, based on the contributions made by the subscriber after joining the scheme. In case the account is closed before you reach 60 years of age, only subscriber's contribution plus interest earned is paid. You will lose the government’s co-contribution or the interest earned on that amount.

Can a non-resident Indian open an APY account? NRIs in the 18-40 age group, with a bank account with APY point of presence (PoP) is eligible to open an account. PoPs are entities appointed by the PFRDA to provide services to all the citizens of India to open and operate their NPS accounts.

What happens if a subscriber becomes a non-citizen? The scheme is only open to Indian citizens. So, if a subscriber becomes a non-citizen, their APY account will be closed and the net actual interest earned on contributions (after deducting account maintenance charges) will be refunded. However, the government co-contribution, and the interest earned on the government co-contribution, shall not be returned to such subscribers.

Does APY provide any tax benefits? Taxpayers can avail exemption on contributions made by individuals under Section 80CCD of the Income Tax Act, 1961 for up to ₹1,50,000. Additional exemption of ₹50,000 for contributions to the APY can be claimed under Section 80CCD(1B).

Disclaimer: This story is for educational purposes only. We advise investors to check with certified experts before making any investment decisions.