Tax Savings

Atal Pension Yojana – Objective, Eligibility & Tax Benefits


The Atal Pension Yojana Scheme is a pension program. Prime Minister Narendra Modi started it on May 9, 2015, to help senior citizens become self-sufficient after retirement. The plan ensures that poor people will have more money later.

The Pension Fund Regulatory and Development Authority is in charge of running the APY scheme. Its goal is to give everyone in the country a social security system, especially the poor, the less fortunate, and workers in the unorganised sector.

What Is Atal Pension Yojana Scheme?

The Atal Pension Yojana scheme aims to provide retirement security to all Indian citizens so that they don’t have to worry about getting sick, hurt, or dying in old age. People from the unorganised sector can apply for the scheme. These pension benefits do not apply to the private sector or working people.

The Atal Pension Yojana scheme promises beneficiaries a minimum monthly pension. After 60, subscribers can select a pension plan of Rs. 1,000, Rs. 2,000, Rs. 3,000, Rs. 4,000, or Rs. 5,000 per month. How much of a pension a person gets depends on how old they were when they joined APY and how much they put in each month.

Objectives of the Atal Pension Yojana Scheme

This pension programme helps unorganised people save early for retirement. The scheme’s return depends on the monthly payments and the person’s age.

Atal Pension Yojana scheme recipients get monthly payments from the money they save. The Atal Pension Yojana is focused upon:

  • Unorganized sectors such as house help, gardeners, delivery boys, etc.
  • Give people a sense of safety and help them during illnesses, accidents, and diseases.

Why Was the Atal Pension Yojana Scheme Started?

Earlier pension plans could not deal with the country’s unique demographics. The Swavalamban Scheme could not help many people because the benefits were not clear. Swavalamban also did not promise to provide a minimum pension.

Also, the unorganised sector, a big part of the workforce, wasn’t discussed. Considering this problem, the Indian government launched the Atal Pension Yojana scheme in 2015–16.

Atal Pension Yojana Details 

  • Subscribers get a fixed pension of between Rs. 1000 and Rs. 5000. People can join the scheme between the ages of 18 and 40. If subscribers join early, their contributions will be low, but that will go up if they join late.
  • The same pension goes to the spouse after the subscriber dies.
  • After a spouse dies, all of their pension money goes to the people they chose.
  • Like contributions to the National Pension System, contributions to the Atal Pension Yojana scheme (APY) can get tax breaks.
  • The central government will pay into the pension scheme for the next five years. The government contributes 50% of the monthly subscription fee or Rs. 1000, whichever is less.

Atal Pension Yojana Scheme Eligibility

To take advantage of the many benefits of the Atal Pension Yojana scheme, people must meet the following requirements:

  • The people who sign up for the Atal Pension Yojana should be Indian citizens.
  • To apply for the scheme, a person must be at least 18 years old and no more than 40 years old. If a person joins at age 40 and wants a monthly pension of Rs. 1,000, they have to pay more than someone who joins at age 18.
  • The people who join must make regular payments for at least 20 years, depending on their age when they join and the pension slab they choose.
  • APY applicants should have a valid mobile number and a bank account linked to their Aadhar number. This is a very important step in signing up and getting updates on the APY account.

Atal Pension Yojana Benefits

Here are a few of the best things about the Atal Pension Yojana scheme:

  • Steady Source of IncomeAfter a person reaches 60, they are given a steady source of income. This makes it possible for them to pay for basic needs like medications, which are common in old age.
  • Government SupportThe Indian government is behind this pension plan. The Pension Funds Regulatory Authority of India (PFRDA) ensures the scheme. So, people don’t have to worry about losing their pensions because the government backs them up.
  • Focus on the Unorganized SectorThe scheme was created primarily to assist people who work in the unorganised sector with their finances in order for them to be financially independent in their later years.
  • Nominee FacilityIf a beneficiary dies, their spouse can benefit from this program. They can either close their account and get the whole fund or get the same pension as the original beneficiary. If both the beneficiary and their spouse die at the same time, the whole corpus amount will go to the nominee.

Tax Benefits of the Atal Pension Yojana Scheme

Under Section 80CCD of the Income Tax Act of 1961, people who invest in the Atal Pension Yojana can get a tax break. Under Section 80CCD (1), a person can get a tax break of up to 10% of their total gross income, up to a maximum of Rs. 150,000. Section 80CCD (1B) lets you get an extra Rs. 50,000 tax break for the Atal Pension Yojana Scheme.

Application Process for the Atal Pension Yojana Scheme

To get the perks of the scheme, follow the steps below:

  • The APY scheme is available at all nationalised banks. People can access an APY account at any of these banks.
  • You can also find the account opening forms on the official web portal. You can download the application form.
  • The application form is available in eight different languages: English, Telugu, Tamil, Odia, Marathi, Kannada, Gujarati, and Bangla.
  • To apply, visit the bank and fill out an application.
  • Give a working phone number.
  • You’ll need to provide a photocopy of your Aadhaar card.
  • If your application is accepted, you will get a message letting you know.

Atal Pension Yojana Contributions

The chart shows how much subscribers can give each month. They can also make contributions every three months and every six months.

Entry ageRemaining years of contributionMonthly instalment for Rs. 1,000 monthly pension/ corpus amount Rs. 1.7 lakhMonthly instalment for Rs. 2,000 monthly pension/corpus amount Rs. 3.4 lakhMonthly instalment for Rs. 3,000 monthly pension/corpus amount Rs. 5.1 lakhMonthly instalment for Rs. 4,000 monthly pension/corpus amount Rs. 6.8 lakhMonthly instalment for Rs. 5,000 monthly pension/corpus amount Rs. 8.5 lakh


Atal Pension Yojana scheme mainly focuses on the unorganised sector people. Previously, the unorganised sector wasn’t covered in its genuine essence, but with this strategy, the government is on track to accomplish its slogan of “Sabka Saath, Sabka Vikaas.” 

It lets investors put in money they can easily afford and then get a pension from that money when they retire. Anyone who wants to save some of their income for retirement can use this plan. If you want to know more about government schemes, visit Piramal Finance.