If you are an individual working in the unorganized sector and worried about your retirement, then you can consider investing your money in the Atal Pension Yojana (APY). It is a Social Security Scheme introduced by Govt. of India, aimed at providing a steady stream of income after the age of 60 to all citizens of India. It is based on National Pension Scheme (NPS) framework. APY, formerly known as Swavalamban Yojana, was launched by Prime Minister Narendra Modi on 9 May 2015 in Kolkata.
Under the scheme, the subscribers have a choice to get a fixed monthly pension amount of Rs. 1000 - 5000 by paying a monthly premium.
Eligibility.
Any Indian that works in an unorganized sector like mining, manufacturing, construction, etc, and in between the age of 18-40 years can avail the benefits of this scheme. The investors start receiving the benefits as soon as they retire or turn 60.
How much do you need to invest?
Under the APY, one can select how much pension he or she wants to receive at the time of retirement and can invest accordingly. One can select from an option to receive a minimum monthly pension of Rs 1000 to a maximum monthly pension of Rs 5000.
If the investor wants to receive Rs 5,000 after retirement then they need to start investing at the age of 18 with Rs 210 per month in the APY. Meanwhile, investors of 20 or 25 will need to invest more than Rs 210 i.e. Rs 248 and Rs 376 respectively. The amount increases with the age.
Other Benefits.
The contributions made under APY have the same benefits that one gets under the National Pension System (NPS) scheme. The contributions you make under this scheme can be availed under Section 80CCD (1B) of the Income Tax Act. The current limit for income tax deduction Section 80CCD (1B) is Rs 50,000. This is more than the Rs 1.5 lakh allowed under Section 80C.
What is the investor dies?
In case the investor dies and is survived by a spouse, then they continue to receive the pension till their death. If the investor is not survived by anyone then the entire amount gets transferred to the nominee in the scheme.
How To Apply?
You can apply for this scheme through the bank you have an account with. All the banks have forms for the APY. These forms are available in several different languages. The individual can collect the form in the language of their choice.
The application form has to be filled and submitted to the bank. If you have an account with the bank, your KYC details will be replicated from the bank account. Once the application is processed and the account is opened, the individual will be intimated by SMS on his registered mobile number.
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