Atal Pension Yojana – Features, Eligibility Criteria and Tax Benefits

Atal Pension Yojana

Atal Pension Yojana is among one of the initiatives taken by the Government of India. The main idea behind launching this plan is to help the unorganized sector of the Indian society. “Atal Pension Yojana” was introduced in June, 2015. Atal Pension Yojana has been administered by PFRDA (Pension Fund Regulatory and Development Authority) issued under the National Pension System (NPS).

Furthermore, Atal Pension Yojana scheme was basically launched to encourage the weaker section of the society. It is pension fund will benefits them during their older age. Well this scheme is available for all individuals who are either working in private sector or self-employed individuals. Well Atal Pension Yojana scheme encourages the weaker section of the society to secure their future.

As under this scheme individuals will receive guaranteed monthly pension amount after attaining the age of 60 years. However, when the scheme was launched at that point of time there was no feature of tax benefit to save tax. But now APY scheme is treated as NPS hence it offers tax benefits under Sec 80CCD(1) and Sec 80CCD(1B).

To know Atal Pension Yojana in detail you can go throw the pdf given below:

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Features of Atal Pension Yojana:

  1. Any individual who is citizen of India and is between 18 to 40 years of age can apply for this scheme.
  2. Individual should have a saving account.
  3. One individual can only open one account.
  4. Guaranteed monthly pension can be received after the age of 60 years.
  5. Mode of auto debit facility can be also changed like from monthly/quarterly/half yearly once in year in the month of April.
  6. You can even opt for decrease or increase in pension amount during the phase of accumulation once in a year.
  7. It has been mandatory for the policy holder to assign a nominee. If the subscriber is married then obviously his/her spouse will be the default nominee. However if the subscriber is unmarried then he/she can provide the details of the nominee which he/she can change after marriage by providing details of spouse.

Benefits of Atal Pension Yojana

  1. You can easily avail the scheme by visiting the bank branch in which you have a saving account.
  2. Guaranteed monthly income of about Rs 1000, Rs 2000, Rs 3000, Rs 4000 and Rs 5000 to the subscriber after the age of 60 years.
  3. In case if the subscriber dies before 60 years then his/her spouse would be provided with an option to continue the policy as usual until the original subscriber would not attain the age of 60 years.
  4. In case if after the death of the subscriber his/her spouse does not want to continue the policy then he or she can do that and can even claim the amount.
  5. After the death of subscriber, the pension amount will be delivered to his or her spouse. However if both subscriber and spouse dies then the pension wealth accumulated till the age of 60 years will be given to the nominee.
  6. For exiting from the policy before the age of 60 years will be allowed in some exceptional circumstances like in case of death or terminal disease to the subscriber.

Also Read>>> Pradhan Mantri Vaya Vandana Yojana – LIC Pension Plan

Monthly Contribution under Atal Pension Yojana

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Tax Benefits Under Atal Pension Yojana:

Let us now discuss the tax benefits provided under Atal Pension Yojana. Since it is very important to understand what all benefits you will receive while investing in any kind of scheme. While these days one benefit that people always check while investing is the feature of tax benefit. As this scheme earlier didn’t offered any tax benefit before but now it does. So lets check out the features of tax benefits offered by Atal Pension Yojana.

Atal Pension Yojana Tax Benefits During Investment:

Earlier there were lots of confusions about what are tax benefits offered under APY scheme. But now CBDT has cleared all the doubts and so now you can enjoy tax benefits under this scheme too. To understand tax benefits during investment there are basically two sub-section under Sec 80CCD.

1. APY Tax Benefits under Sec. 80CCD(1)

  • Maximum benefit that will be available is of Rs 1.5 lakh.
  • Maximum 20% of individual annual income contribution will be eligible for deduction.
  • This section will form a part of Sec.80C limit.

2. APY Tax Benefits under Sec.80CCD(1B)

  • Additional tax benefit provided will be eligible for upto Rs 50,000 income tax deduction.
  • One can even avail the tax benefits of this Sec.80CCD (1B) from the financial year 2015-2016.
  • Private employees and self-employed individuals will be eligible for this deduction.
  • This is over and above Sec.80CCD (1).

Atal Pension Yojana Tax Benefits During Retirement:

The pension that you will receive during your retirement is considered as salary income. Hence at the time of retirement the tax will be applied according to the tax slab prevailing at that time.

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