Why Atal Pension Yojana?

Retirement planning is one of the most overlooked topic among the citizens of India especially in the informal sector. Although many companies provide retirement benefits and so do government jobs, it is important to note that a significant population in India do not get these benefits. This makes Retirement Planning a crucial topic which should not be overlooked. As a signification part of India lacks formal pension benefits which is why the Government of India introduced the Atal Pension Yojana also known as APY in the year 2015. It is named after the late Prime Minister Atal Bihari Vajpayee. This scheme aims to provide a stable financial future which we can also say as a Retirement Plan to the informal sector of India by offering a guaranteed pension and giving a stable income after retirement.

In this article we will dive deep into the key aspects of the scheme and also discuss why and how is it an excellent choice for those who belong to the informal sector with no retirement benefits and for those who want to secure their retirement years.

What is Atal Pension Yojana?

Atal Pension Yojana is a scheme backed by government of India which aims to help the poor working class people of India to save money for their retirement. It is regulated by the Pension Fund Regulatory and Development Authority of India (also known as PFRDA) which gives an assurance that your money is in safe hands. The scheme gives a monthly income of rupees 1000 to 5000 per month to a retired individual after the age of 60. The monthly income is decided by the contribution the subscriber of this scheme has made before retirement. The primary target audience of this scheme are who are not getting any benefits from their current informal jobs or any other statutory social security schemes.

Key Features of Atal Pension Yojana 

Now let us talk about the benefits of Atal Pension Yojana and the key points of this scheme.

1. Guaranteed Monthly Pension

The strongest benefit of Atal Pension Yojana is a stable monthly income after retirement. Although 1000 to 5000 rupees is not a lot, it still adds as a source of income combined with other stable income sources. The scheme adds to a financial certainty and security post your retirement. The scheme is backed by the Government which is an additional trustworthiness and reliability factor adding to the secure income source. One of the strongest appeals of APY is the guaranteed monthly pension it offers. Subscribers are given a choice between 1000 to 5000 rupees depending on the contribution they are willing to make.

2. Wide Eligibility Criteria

Another key factor of Atal Pension Yojana is the wide eligibility criteria. Anyone who is a citizen of India and is between the age of 18 and 40 can join the scheme provided he/she has a bank account. This inclusivity and wide eligibility criteria helps a significant part of India who do not have any formal pension guarantee post retirement.

3. Government Co-Contribution

Certain subscribers are eligible for a co-contribution by the government. If you are eligible, the government will make a 50% contribution up to a maximum of rupees 1000 to your scheme. The benefit is only available to those who subscribed to this scheme between June of 2015 and December of 2015 and are not covered by any other social welfare programs. This contribution is a significant amount as the government is literally paying for half of your benefit and this amount get accumulated for a period of 5 years and enhances the value of the scheme.

4. Flexible Contribution Levels

Atal Pension Yojana was made with flexibility and accessibility in mind. If you are not ready to make a significant contribution to this scheme leading to a full benefit post retirement, no need to worry. Subscribers can decide the contribution amount based on the pension they desire post retirement. The payments for this scheme can be made on monthly, quarterly and half yearly basis. This gives subscribers a significant advantage over flexibility of this scheme.

5. Tax Benefits

Who does not want to save taxes? All the contributions which are made to the Atal Pension Yojana are eligible for tax benefits under Section 80CCD of the Income Tax Act, 1961. You can save up to 50 thousand rupees every year on taxes under section 80CCD(1B) over and above Rupees 1.5 lakhs allowed under section 80C. We recommend contacting a chartered accountant to discuss regarding this. This benefit attracts a lot of tax payers of India to contribute in this scheme.

6. Ease of Operation

Worried about the payments to this scheme? No need to worry as managing the payments is pretty straightforward and easy. A subscriber can just link the scheme with his/her bank account. The payments are then auto deducted depending on the term the subscriber chooses. This minimises the hassles of ensuring that the payments are made in a timely fashion. This is good especially for those who find money management a difficult task.

7. Social Security Strengthening

This scheme not only promotes inclusivity but also reduces poverty among the old age population of India.

How to Enroll in Atal Pension Yojana

Enrolling in APY is simple but we also recommend contacting a financial advisor:

  1. Open a Bank Account: If you don’t already have one, open a bank account.
  2. Visit Your Bank: Go to the bank where you maintain your account and fill out the registration form of this scheme. Contacting your bank’s relationship manager.
  3. Provide Necessary Information: You will need to provide personal details, choose a pension amount, and set up a contribution plan.
  4. Setup Auto-Debit: Ensure you set up an auto-debit facility to automatically deduct your contributions from your bank account.


The Atal Pension Yojana provides a vision for reducing poverty in India and increasing inclusivity. It is great scheme for providing a stable retirement future by providing a fixed source of income. The seven reasons mentioned make Atal Pension Yojana a great choice for those seeking to secure their future and also save taxes. With this scheme, you can step confidently into your retirement knowing that you are already prepared.


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