The Atal Pension Yojana (APY), launched in 2015, provides a guaranteed pension of up to Rs 5,000 to subscribers. The scheme offers five guaranteed pension brackets: Rs 1,000; Rs 2,000; Rs 3,000; Rs 4,000, and Rs 5,000. Anyone between the ages of 18 and 40 years can join the scheme, which guarantees a fixed pension after the subscriber turns 60.

Initially, it was open to all resident Indian citizens, regardless of their tax-paying status. However, in 2022, the eligibility was restricted to non-taxpayer citizens. At present, taxpayers who opened APY accounts before October 1, 2022, can continue contributing to their APY accounts. However, after this date, new APY accounts cannot be opened by individuals who are or have been taxpayers.

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As a voluntary pension scheme, APY allows subscribers to choose their contribution payment frequency from monthly, quarterly, or half-yearly. According to the National Pension System (NPS) Trust website, APY contributions are collected directly through auto-debit from subscribers’ bank accounts. For monthly contributions, deductions occur on any date within the month; for quarterly or half-yearly contributions, deductions happen on any day within the first month of the respective period.

What If The Contribution Is Missed For A Month, Quarter, Or So?

If the payment is delayed, subscribers will have to pay the overdue interest as well as charges for the delayed period exceeding the due date.

Overdue Interest: Notably, the overdue interest a subscriber pays along with delayed instalment is credited to the APY account and becomes a part of the pension corpus.

Charges For Delayed Or Non-Payment Of Contribution: A subscriber needs to pay penal charges for non-maintenance of the required balance in bank account for APY contribution. The charges are based on the amount of contribution and time of delay.

Here is the list of the prescribed charges for delayed or non-payment of contributions:

Contribution Per Month Penalty

• Up to Rs 100 Re 1

• Between Rs 101 and Rs 500 Rs 2

• Between Rs 501 and Rs 1,000 Rs 5

• Rs 1,001 and above Rs 10

* Taxes are not included

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So, for instance, if there is a delay in contributions of Rs 1,500 for a month, the bank will then collect Rs 10, and if the delay is for more than one month, it will charge Rs 10 for each month of the delay. The higher the contribution amount, the higher will be the charge per month.

To avoid this, subscribers should maintain sufficient amount in their bank accounts during the deduction period or the month when the payment falls due. Besides, they can change their payment frequency from monthly to quarterly or semi-annually, or vice versa, to align with their earning frequency.

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What Happens To The APY Account If There Is No Contribution?

According to the NPS Trust website, “An APY account never gets closed due to non-payment of contributions by the subscriber”. So, even if there is a delay, subscribers have the option to activate their account by paying overdue interest, while the account maintenance and other charges are deducted directly from the account balance.

So, if you have an APY account, it will not be closed due to non-payment. One can reactivate the account at any time by paying the overdue interest and then paying contributions timely to keep it active.