Question 1

What is the minimum contribution for Atal Pension Yojana?

Accepted Answer

The minimum APY monthly contribution is Rs. 42 per month for a subscriber who joins at age 18 and opts for Rs. 1,000 monthly pension. Contributions are fixed by PFRDA and depend on your entry age and desired pension amount (Rs. 1,000 to Rs. 5,000 per month). The older you are when you join, the higher the monthly contribution required to build the same corpus by age 60.

Question 2

Who is eligible for APY scheme in India?

Accepted Answer

Any Indian citizen between 18 and 40 years of age who holds a savings bank account (including post office savings account) is eligible to join APY. The subscriber must not be an income tax payer (as of 2015 revision) and should not already be covered under NPS or a statutory social security scheme. Each individual can have only one APY account. The scheme is targeted at workers in the unorganised sector.

Question 3

How is APY different from NPS?

Accepted Answer

APY (Atal Pension Yojana) provides a guaranteed fixed pension of Rs. 1,000 to Rs. 5,000 per month at age 60, with a defined corpus returned to the nominee on the subscriber's death. Contributions and corpus are fixed per PFRDA's table. NPS (National Pension System), by contrast, is market-linked — the corpus and pension depend on investment returns and can be much higher (or lower). NPS also allows much larger contributions and a 60% tax-free lump sum at maturity, while APY has no lump sum withdrawal option (the full corpus is the pension backing). APY is better for guaranteed, predictable income; NPS is better for wealth creation.

Question 4

What happens to APY corpus if the subscriber dies before 60?

Accepted Answer

If the subscriber dies before age 60, the spouse can continue the APY account and claim the same pension at age 60. Alternatively, the spouse can close the account and receive the accumulated corpus (not just the contributions — the full pension wealth amount). If the spouse is also deceased, the nominee receives the accumulated pension corpus as a lump sum. For example, for the Rs. 5,000/month pension plan, the corpus of Rs. 8,50,000 is returned to the nominee.

Question 5

Can I increase my APY pension amount after joining?

Accepted Answer

Yes. APY subscribers can upgrade or downgrade their pension amount once per year during April. For example, you can increase from Rs. 2,000 to Rs. 3,000 monthly pension. The contribution will be revised based on your age at the time of upgrade. This gives flexibility to align with your improving income and financial goals over time. However, you cannot exceed Rs. 5,000 monthly pension under APY.

Question 6

Is APY covered under Section 80CCD tax deduction?

Accepted Answer

Yes. Contributions to APY are eligible for tax deduction under Section 80CCD(1) of the Income Tax Act, within the overall Rs. 1.5 lakh limit under Section 80C/80CCE. However, APY contributions are relatively small, so for significant tax savings, NPS (which also offers an exclusive Rs. 50,000 deduction under 80CCD(1B)) is generally more tax-efficient.

Question 7

What is the government co-contribution under APY?

Accepted Answer

The Government of India co-contributed 50% of the subscriber's contribution or Rs. 1,000 per year (whichever was lower) for 5 years for subscribers who joined between June 2015 and December 2015 and were not income tax payers. This co-contribution benefit has ended for new subscribers joining after 31 December 2015. All new subscribers are solely responsible for their own contributions.

Question 8

What happens on premature exit from APY?

Accepted Answer

Voluntary premature exit from APY before age 60 is permitted only in exceptional circumstances — terminal illness or death of the subscriber. In such cases, the subscriber or nominee receives only the subscriber's own contributions plus the net actual interest earned on those contributions (after deducting administration charges). The government co-contribution (if received) and returns thereon are not refunded on voluntary premature exit.

Question 9

Which bank can I use to open an APY account?

Accepted Answer

APY is available through all scheduled commercial banks, regional rural banks (RRBs), cooperative banks, and post offices across India. You can open APY through net banking, the bank's mobile app, or by visiting your bank branch. The contribution is auto-debited monthly (or quarterly/half-yearly) from your savings account on the due date.

Question 10

Can I have both NPS and APY?

Accepted Answer

Yes, you can have both NPS and APY accounts simultaneously. They serve different purposes — APY provides a small but guaranteed pension (Rs. 1,000 to Rs. 5,000/month), while NPS can build a much larger corpus for higher retirement income. Financial planners often recommend APY as a guaranteed minimum pension floor, with NPS layered on top for additional wealth creation and tax efficiency.

Question 11

What is the corpus amount under APY?

Accepted Answer

The guaranteed corpus under APY at age 60 depends on the chosen pension amount: Rs. 1,70,000 for Rs. 1,000/month pension; Rs. 3,40,000 for Rs. 2,000/month pension; Rs. 5,10,000 for Rs. 3,000/month pension; Rs. 6,80,000 for Rs. 4,000/month pension; and Rs. 8,50,000 for Rs. 5,000/month pension. This corpus is returned to the nominee on the subscriber's death after age 60.

Question 12

How is APY contribution deducted?

Accepted Answer

APY contributions are auto-debited from the subscriber's linked savings bank account. Subscribers can choose monthly, quarterly, or half-yearly debit frequency. For monthly debit, the amount is deducted on the 1st of each month. If there are insufficient funds, a penalty is levied: Rs. 1 per month for contribution up to Rs. 100; Rs. 2 per month for Rs. 101-500; Rs. 5 per month for Rs. 501-1,000; and Rs. 10 per month for contributions above Rs. 1,000.

Atal Pension Yojana (APY) Calculator

Frequently Asked Questions — APY

Atal Pension Yojana (APY) Calculator

Frequently Asked Questions — APY

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