Atal Pension Yojana: Pay Rs 210 a month and get Rs 5,000 monthly pension after hitting 60 years of age

Retirement planning is one of the most important elements of life. There are multiple instruments to save for retirement. Among them Atal Pension Yojana (APY) is one of the most popular schemes. It is a government-sponsored social security scheme launched in 2015 and administered by the Pension Fund Regulatory and Development Authority (PFRDA). One can opt for this scheme through a public or private sector bank branch or post offices. APY offers a guaranteed pension after the age of 60, provided monthly contributions are paid till the age of 60.

In normal cases one cannot exit the scheme before 60 years of age. Private sector employees without any pension benefits can also apply for this scheme.

Triple benefits: Atal Pension Yojana offers triple benefits of lifelong pension to the subscriber, lifelong pension to the spouse after the subscriber’s demise. Moreover, after the death of both of them, the entire corpus is returned to the nominee.

Entry age: The minimum entry age of Atal Pension Yojana 18 years. One can apply for the scheme till 40 years of age.

Premium paying terms: One has to invest for at least 20 years in order to get the retirement benefits.

Monthly pension: Investors will be entitled to enjoy a fixed monthly pension of Rs 1,000, Rs 2,000, Rs 3,000, Rs 4,000, or Rs 5,000 depending on your contribution and age at the time of enrolment.

Premium: The amount of contribution to be made depends on your age, pension amount and the contribution period. For example, if one opts for the Atal Pension Yojana at the age of 18 and invests Rs 210 per month till the age of 60 years, he or she will start receiving Rs 5,000 every month for a lifetime from 60 years of age.

At the same time, for a monthly pension of Rs 1,000, you have to deposit only Rs 42 per month. Whereas, Rs 84 will have to be deposited every month for a pension of Rs 2,000, Rs 126 for a pension of Rs 3,000 and Rs 168 for a monthly pension of Rs 4,000.

Taxability: Apart from the above benefits, contributions towards APY are eligible for tax deduction up to Rs 50,000 under section 80CCD (1B) of the Income Tax Act, which is additional to Rs 1.5 lakh allowed under section 80C.