Atal Pension Yojana (APY), launched by the Government of India in June 2015, is a pension scheme for the economically backward working class in the unorganized sector.

This social security scheme was introduced as a replacement to the previous government’s Swavalamban Yojana NPS Lite, which was not well accepted by the people.

However, APY has actually seen light of the day and is a scheme for the unorganized sector workers offering monthly pension in the slabs between Rs. 1,000 to Rs. 5,000.

Meaning, a subscriber can receive Rs. 1000, 2000, 3000, 4000 and 5000 based on the contribution made. Also, earlier a subscriber joins the scheme, the lesser contribution he/she has to make in the scheme.

To provide a booster to the scheme, the central government even made a co-contribution of 50% for five years of the total prescribed amount by a worker, up to Rs. 1000 for the people joining APY before 31st December 2015.

Eligibility for Subscription to Atal Pension Yojana

Any citizen of India can join the Atal Pension Yojana scheme. The two main eligibility criteria are:

  • The age of the subscriber should be between 18-40 years;
  • The subscriber should have a savings bank account/ post office savings bank account;

(Note: The prospective applicant may also provide Aadhaar and mobile number to the bank during registration to facilitate receipt of periodic updates on the APY account. However, this is not mandatory for enrolment)

The age of exit and start of pension is 60 years. This means that the minimum period of contribution in the scheme for a beneficiary is 20 years, and the maximum period is 42 years. Exit and payment of pension are not allowed, except in situations like the death of the beneficiary or terminal disease.

Contribution Amount

The contribution amount for APY depends on three factors namely:-

  • Age of the person on which he wants to join the scheme;
  • The pension slab the subscriber opts for;
  • The time between payments i.e. monthly, quarterly or half-yearly;

As of now, an 18-year old subscriber needs to pay between Rs 42 and Rs 210 per month depending on the specific pension slab. On the other hand, a 39-year old applicant will have to pay from Rs 264 to Rs 1318 every month, depending on the pension slab chosen.

This scheme also allows subscribers to increase or decrease the pension amount during the course of the accumulation phase, once in a year in the month of April.

(Note on due date of contributions: The contribution may be paid to APY through savings bank account on any date of the particular month, in case  monthly contributions are made or any day of the first month of the quarter, in case quarterly contributions are made or any day of the first month of the half-year, in case of half-yearly contributions)

Benefits of Atal Pension Yojana

Let us now discuss the benefits of Atal Pension Yojana:-

  • Tax Benefit: The contributions made under Atal Pension Yojana scheme is tax deductible under section 80 CCD;
  • Guaranteed Pension: The scheme also guarantees minimum pension between Rs. 1000 to Rs. 5000 per month post the contribution period i.e. till 60 years;
  • Pension to the spouse: In case of any death of the subscriber/insured, pension would still be payable to the spouse;

(Note: In case the subscriber dies before the age of 60 years, the spouse of the deceased will have the option to either exit the scheme and claim the accumulated amount or continue to make the payments in the subscriber’s name for the remaining years. In the latter case, the spouse will continue receiving the same pension amount until the death)

  • Corpus payment to the nominee: In case of death of both the spouse and subscriber, the entire amount of proceeds will be paid to the nominee.

Restrictions on Government Borrowing

Though the government has made co-contribution in many cases, if someone is a member of the Social Security Schemes under any of the following enactments, they would not be eligible to receive the government co-contribution:-

  • Employees’ Provident Fund & Miscellaneous Provision Act, 1952;
  • The Coal Mines Provident Fund and Miscellaneous Provision Act, 1948;
  • Assam Tea Plantation Provident Fund and Miscellaneous Provision, 1955;
  • Seamens’ Provident Fund Act, 1966;
  • Jammu Kashmir Employees’ Provident Fund & Miscellaneous Provision Act, 1961;
  • Any other statutory social security scheme

Procedure for Opening APY Account

The procedure for opening up an APY account is simple and can be done by following the below mentioned steps:-

Step 1: Approaching the bank/ post office where the subscriber has a bank account;

Step 2: Providing the bank account number/ post office account number and filing up the APY registration form;

Step 3: Providing Aadhaar / Mobile number. Though this is not mandatory, may be provided for the facilitation of communication;

Step 4: Ensuring that there are sufficient funds in the savings bank account/ post office savings bank account for the transfer of monthly/ quarterly/ half-yearly contribution.

Procedure for Withdrawal of APY Account

There are two ways of withdrawal in the Atal Pension Yojana scheme as discussed below:-

  • Upon completion of 60 years of age:

After attaining the age of 60 years, one needs to get in touch with the respective bank or post office and submit the request for drawing the pension.

However, if in case of subscriber’s death after 60 years, the same amount of monthly pension is payable to spouse (i.e. the default nominee). In such a case, a nominee will be entitled for return of pension wealth accumulated till age 60 of the subscriber upon death of both the subscriber and spouse.

  • Exit before the age of 60 Years:

As per circular dated May 2, 2016, on PFRDA (Pension Fund Regulatory and Development Authority) website, voluntary exit in APY is not permitted generally, until exceptional circumstances such as terminal illness, or death of the subscriber etc. occur and based on which exit can be allowed.

In case a subscriber, who has availed Government co-contribution under APY, chooses to exit APY voluntarily at a future date, he/ she shall only be refunded the contributions made by him to APY, along with the net actual accrued income earned on the contributions.

However, the subscriber, in this case, will not be entitled to the government co-contribution and the accrued earned.

More Facts about Atal Pension Yojana


1. Multiple Accounts not Permitted

A subscriber can open only one APY account and it is unique. Multiple accounts are not permitted;

2. Nominee Details are Must

It is mandatory to provide nominee details in APY account. The spouse will be the default nominee if the subscriber is married.

However, unmarried subscribers can nominate any other person as nominee & they must provide details of the spouse after marriage.

3. The situation of Insufficient Balance

If there is an inadequate balance in the saving bank account/ post office bank account of the subscriber till the last date of the month / last date of the first month in the quarter (quarterly) / last day of the first month in a half year (half-yearly), it will be treated as a default contribution and will have to be paid in the subsequent month along with the overdue interest accumulated for delayed contributions.

Banks are required to collect Rs. 1 per month for the contribution of every Rs. 100, or part thereof, for each delayed monthly contribution.

3.Continuous Default

A deduction will occur in the subscribers account for account maintenance charges and other related charges on a periodic basis.

However, once the account balance in the subscriber’s account becomes zero due to the deduction of account maintenance charges, fees and overdue interest, the account would be closed immediately;

4. Physical Statement

The physical state of APY account will be provided to the subscribers annually.

Disclaimer: The views expressed in this post are that of the author and not those of Groww