Atal Pension Yojana: Investment of Rs 42 a month will fetch you fixed monthly pension of Rs 1,000.
Atal Pension Yojana or APY is a pension scheme which aims at the unorganised sector such as delivery boys, maids, delivery boys, etc. It is social security scheme in the insurance and pension sector which was launched by the government for all citizens of Indian to provide them a defined pension between Rs 1,000 to Rs 5,000, depending on the contribution and its period.
It is administered by the Pension Fund Regulatory and Development Authority (PFRDA). This scheme allows an individual to have a guaranteed regular pension after their retirement age. Any Indian citizen between the age of 18 years and 40 years can join this scheme.
It may be noted that in order to get a fixed monthly pension between Rs 1,000 and Rs 5,000 a month, the subscriber has to contribute between Rs 42 and Rs 210 per month if he is joining at the age of 18 years. On the other hand, if the subscriber joins at the age of 40 years then the contribution would range between Rs 291 and Rs 1,454 per month, for the same fixed pension levels.
If any person is joining APY at an age of 40 years, then in order to avail the pension he/she still needs to pay a premium for a minimum of 20 years.
According to PFRDA website, “The Central Government would also co-contribute 50 per cent of the total contribution or Rs 1,000 per annum, whichever is lower, to each eligible subscriber account, for a period of 5 years, i.e., from Financial Year 2015-16 to 2019-20, who join the APY between the period 1st June, 2015 and 31st December, 2015 and who are not members of any statutory social security scheme and who are not income taxpayers.
One can get a tax benefit under Section 80CCD of Income Tax Act, for contributions made to the APY. The maximum amount that can be deducted from taxable income under this scheme is Rs 2 lakh a year. The combined deduction under Section 80C and Section 80CCD cannot exceed Rs 2 lakh.
