Atal Pension Yojana: Invest Rs 84 Every Month in This Scheme To Earn Pension Rs 24,000 Every Year

Under the scheme, you have the option to earn a fixed pension of Rs 1,000 to Rs 5,000 per month

Atal Pension Yojana (APY), the retirement planning scheme, was launched by the Prime Minister Narendra Modi in 2015. Under the scheme, you have the option to earn a fixed pension of Rs 1,000 to Rs 5,000 per month, after completing the age of 60 years. The government is, however, considering to increase the pension limit to Rs 10,000. The scheme provides you guaranteed returns over the period of  20-42 years and is suitable for those who have low income and do not have access to any social security system.

The scheme is available to all bank account holders with the minimum age of 18 years and the maximum age of 40 years.

The amount of pension depends on your contribution, which in turn depends on the age of joining the scheme. For example, an 18 -year-old needs to pay Rs 84 a month for a pension of Rs 2000 per month. Similarly, for the pension of Rs 5,000, an 18-year-old needs to pay Rs 210. You need to contribute for 20 years and more before you start getting pension under the scheme.

Upon completion of 60 years, one needs to submit the request to the associated bank for drawing the guaranteed monthly pension. You cannot exit before 60 years of age as it is not permitted. However, it is permitted only in exceptional circumstances such as in the event of the death of the beneficiary or terminal disease.

There are also tax benefits of investing in Atal Pension Yojana. Just like National Pension System (NPS), your contribution in APY can avail tax deduction under 80 C. It is also eligible for additional Rs 50,000 under Section 80CCD (1B) of the Income Tax Act.

It is important to note that you need to continue with your investments in the scheme as any discontinuation will freeze your account after six months. After the period of 12 months, it will get deactivated and will get closed after 24 months. In the end, considering that the pension amount is not very big, the scheme is suitable for people who are economically backward and have low saving capacity.