Question 1

What is Atal Pension Yojana (APY)?

Accepted Answer

APY is a government pension scheme administered by the Pension Fund Regulatory and Development Authority (PFRDA). You contribute a fixed monthly amount from age 18 to 40, and the government guarantees a fixed monthly pension of ₹1,000, ₹2,000, ₹3,000, ₹4,000, or ₹5,000 once you turn 60. On your death, your spouse continues to receive the same pension, and after both deaths the accumulated corpus is returned to the nominee.

Question 2

Who can join APY?

Accepted Answer

Any Indian citizen between the ages of 18 and 40 who has a savings bank account or post office savings account can join APY. You must have a valid Aadhaar number and mobile number linked to your bank account. Income tax payers who joined APY on or after 1 October 2022 are NOT eligible for the government co-contribution benefit, but they can still subscribe to the scheme at their own cost.

Question 3

Does the government contribute to my APY account?

Accepted Answer

The government co-contribution scheme ran from FY 2015-16 to FY 2019-20 for eligible subscribers (those who were not income tax payers and not covered by any statutory social security scheme). Under that benefit, the government matched 50% of the subscriber's contribution or ₹1,000 per year, whichever was lower, for 5 years. New subscribers no longer receive the co-contribution, but the guaranteed pension benefit remains unchanged for all subscribers.

Question 4

What are the tax benefits under APY?

Accepted Answer

Your APY contributions qualify for a deduction under Section 80CCD(1) of the Income Tax Act, within the overall Section 80C limit of ₹1.5 lakh per year. You can also claim an additional deduction of up to ₹50,000 under Section 80CCD(1B), which is over and above the ₹1.5 lakh limit. The pension income you receive after age 60 is taxable as income in the year you receive it.