Atal Pension Yojana (APY) is a government-backed social security scheme launched in 2015 to provide a guaranteed pension of up to Rs 5,000 after 60 years. The latest data shows that Atal Pension Yojana Adds 79 Lakh Subscribers in the financial year 2023-24, bringing the total to over six crore, compared to 5.25 crore members in May. In FY2021-22, APY enrollments had increased by 25 percent; in FY2022-23, they rose by 20 percent year-on-year.

As of February 28, 2023, the highest enrolments were for a pension of Rs 1,000 (82.42 percent), followed by Rs 5,000 (11.11 percent). The enrollments for Rs 2,000, Rs 3,000, and Rs 4,000 comprised less than 7 percent of the total. The maximum number of contributions were from the age group of 21-25 years (27.97 percent) and 26-30 years (24.60 percent). At the same time, over 45 percent of Atal Pension Yojana beneficiaries were women. 

Atal Pension Yojana (APY) 

The scheme is for the unorganized sector workers. Like NPS, it is administered by the Pension Fund Regulatory and Development Authority (PFRDA). Indians between 18 to 40 years old can apply for the scheme, provided they are not a taxpayer and have savings bank accounts.  

APY pensions are in four slabs: Rs 1,000, Rs 2,000, Rs 3,000, Rs 4,000, or Rs 5,000 per month, depending on the subscriber’s contributions which may differ for different age groups for the same amount. The subscriber can contribute monthly, quarterly, or half-yearly.

Benefits of APY 

APY provides low-income group workers an option to save for the future. As we now know that the Atal Pension Yojana has added 79 Lakh Subscribers, let’s understand its benefits as well.

Regular Guaranteed Pension: Though there are other long-term guaranteed return options for the unorganized sector, such as the provident fund, PF does not offer a pension. APY is simple, easy to understand, and guarantees a lifetime fixed pension. 

Death Benefit: The scheme also offers a death benefit; the spouse is the default nominee who will get the pension after the subscriber’s death. If the subscriber is unmarried, the nominee can be anyone of their choice. After marriage, the spouse automatically becomes the nominee.  

When the subscriber dies, the spouse can either continue getting the pension or close the APY account and collect the contributions in a lump sum. If the subscriber and the spouse are both dead, the next nominee will receive a predefined amount for the particular slab, as per PFRDA. 

Tax Benefit: Contribution towards the scheme qualifies for tax benefits under section 80CCD (1B) and section 80C. However, the tax benefits are only for subscribers who joined APY before October 1, 2022, as the scheme was closed for income taxpayers after this date. The condition of entry in the scheme says that a subscriber can be anyone who is not an income taxpayer.