Atal Pension Yojana- Eligibility & Benefits

Atal Pension Yojana- Eligibility & Benefits

Atal pension Yojana (APY) is a retirement scheme which provide guaranteed monthly pension to all Indian citizens after the age of 60-years. The scheme mainly aims at poor, under-privileged and workers in the unorganized sector.

APY was established by the government of India and was effective from 01, June 2015 onwards. This scheme was named after the former prime minister of India Mr. Atal Bihari Vajpayee.

Objective of APY

To provide guaranteed monthly pension to all Indian citizens after the age of 60-years.

Work Process

  • Open APY account in a Bank and choose the monthly pension you want to receive of Rs.1, 000, Rs.2, 000, Rs.3, 000, Rs.4, 000, or Rs.5, 000. Accordingly the contribution amount will be fixed and you can pay the contribution monthly, quarterly or half-yearly basis till you reach 60-years of age.
  • After 60-years of age, you will receive the monthly pension till the end of your life.
  • After that, your spouse will receive the same guaranteed pension till the end of his/her life.
  • After that, your nominee or legal heirs will receive the accumulated pension wealth following the death of both you and your spouse. This wealth money is predefined when you join the scheme.

Income tax Benefit

  • Initially there was no income tax benefit, but since February 2016 tax benefit is allowed and now it depends upon whether you choose old tax system or new tax system
  • Old tax system: your contribution during a financial year will be eligible for tax deduction under 80C; however, monthly pension received during your retirement life is taxable.
  • New tax system: No income tax benefit. Monthly pension received during your retirement life is taxable.


  • All Indian citizens between age of 18-years and 40-years. However, from 01, October 2022 onwards income tax payers are not allowed to join the scheme.
  • At any time, you can open only one account and it is unique throughout your life.

Monthly Pension & Retirement Wealth

Pension option (in Rs.)

Retirement Wealth (in Rs.)











Pre-Mature Closure

It is allowed in two situation and the benefits will also vary accordingly.

  • Your death or life threatening disease to you- In this case, your nominee or you will get back entire accumulated amount in your APS account. It includes your contribution, government co-contribution if any and the returns earned on both.
  • Voluntarily exit- If you want voluntarily exit before the age of 60-years, you will receive your contribution and the returns earned on them only.

Note: If you die before 60-years of age, then your spouse can choose one of the following options.

  • Continue the account: Spouse can continue to pay contribution into the account for the remaining period and will receive the same guaranteed pension till the end of his/her life.
  • Close the account: Entire accumulated amount including contribution and returns earned will be given to your spouse and the account will be closed.

Frequently Asked Question (FAQ)

Is NRI eligible to open the account?

Yes. But if NRI becomes non-citizen of India, then account will be closed.

Who regulates APS (Atal Pension Scheme)?

PFRDA (Pension Fund Regulatory and Development Authority).

What if delayed and discontinued contribution happens?

Bank will charge penalty for each delayed monthly contribution, Rs.1/-month for every Rs.100. however, this penalty amount will be deposited into your APS account. If you discontinue then you can restart by paying delay contribution and penalty.

Can I get more than guaranteed monthly pension?

There is possibility to get more but it depends on the returns earned from your contributions.

What is government contribution?

Earlier from 01.06.2015 to 31.03.2016, government contribution was available. But if you have opened the APS account after that period, it is not available.

Are Income tax payers eligible to open APS account?


See also…


Leave a Reply

Your email address will not be published. Required fields are marked *