What is Atal Pension Yojana?

This scheme is specially designed for workers in the unorganised sector. This scheme helps workers in the unorganised sector to save for their retirement. You contribute to this scheme while working and your contributions generate return after your retirement. The scheme extends old age protection to house-helps, gardeners, drivers, and other people from the unorganised sector. This scheme is named after the ex-Prime Minister Atal Bihari Vajpayee and was officially launched on 1st June 2015. APY scheme replaced the other social security scheme, the Swavalamban Scheme which wasn’t popular amongst the masses. This scheme is for all the people who join the National Pension System which is supervised and regulated by the PFRDA
(Pension Fund Regulatory and Development Authority). The subscribers of this will receive a fixed minimum pension of Rs. 1000, Rs. 2000, Rs. 3000, Rs.4000, and Rs. 5000 as the pension fund is based on the subscriber’s contributions and the period of contribution.
Anyone working in the unorganised sector between the age of 18 to 40 can become a subscriber of this scheme.The only condition on entry age being that minimum contribution for 20 years is required under the scheme. The central government also plays a major role in this scheme by making contributions. The central government co-contributes about 50% of the total contributions prescribed by the worker or Rs. 1000 per annum whichever unit is lower. The central government can make contributions only for 5 years and for an amount up to Rs. 1000 if the worker joins the scheme before 31st December 2015. So, as per the guidelines, the contributions can only be made for a period of 5 years, i.e, from the financial year 2015-2016 to the financial year 2019-2020.


Pension Fund Regulatory and Development Authority (PFRDA): The regulatory body under Atal Pension Scheme

This organization is responsible for regulating Atal Pension Scheme under the National Pension System. All pension related schemes comes under the purview of PFRDA. According to PFRDA, Atal Pension Yojana has been faring well since it’s advent in 2015 and has set a target of getting 75 lakh new subscribers for the financial year 2019-2020.
A member of PFRDA tells that they have already reached a subscriber base of 1.5 crore people and aims to increase the subscriber base to 2.25 crore by the end of the next fiscal year (end march 2020). By the end of March 2018, the subscriber list of AYP contained 97 lakh people.


Transferring of subscribers from Swavalamban Yojana to Atal Pension Yojana:

Since Swavalamban Yojana was not able to help the targeted audience, the government took the initiative of automatically transferring the subscribers of this scheme to Atal Pension Yojana. The government also provided subscribers with an option of opting out of the scheme if they satisfy the eligibility criteria. Subscribers migrating from the Swavalamban Yojana might not completely benefit from the government’s co-contribution to the scheme.
For example, if you have received contributions from the government for two years under the Swavalamban Yojana, then you will only be entitled to contributions from Government for three years. If the subscriber decides to opt out of the scheme during the transition period, then only till 2016/2017, were the subscriber was entitled to contributions from the government. Under the National Pension System, such subscribers can also continue with Swavalamban Yojana till maturity.
Subscribers falling in the age bracket of 18 to 40 years can opt for migration to Atal Pension Yojana. For a hassle free migration, it is important that you are lending your full support to the migration process. If you yourself want to initiate the process, then you can visit your nearest bank to shift from Swavalamban Yojana account to Atal Pension account. If you are above 40, then you can also opt out of the Swavalamban scheme withdrawing your contributions and the interest earned. Alternatively, you can continue to be a subscriber of Swavalamban Yojana and continue to earn interest till you turn 60.


What are the advantages of Atal Pension Yojana?

  • It provides a pension of Rs. 1000 to Rs. 5000 depending on the corpus amount to the worker.
  • Subscribers can change, i.e, increase or decrease the pension amount once a year during the accumulation period.
  • If the pension’s subscriber dies, then his/her spouse will be entitled to the same pension amount till both the subscriber and the spouse dies.
  • The subscriber is responsible for choosing a nominee who will be entitled to the pension money accumulated by the subscriber till the age of 60.
  • If the subscriber dies before reaching the age of 60 years, then his/her spouse will be presented with two options. The spouse can either continue with the scheme under the subscriber’s name for the remaining years or the pouse can leave the scheme and claim all the accumulated pension amount till that date.

Who is eligible to become a subscriber of Atal Pension Yojana?

You need to fulfil certain conditions before becoming a subscriber of Atal Bihari Pension Yojana:

  • You need to be an Indian citizen.
  • All bank account holders being KYC compliant are eligible to become a subscriber.
  • You should have a valid savings account.
  • To become a subscriber, you should be 18 to 40 years old. But contribution to the scheme needs to be for minimum 20 years.

Monthly contributions and Modes of payment for Atal Pension Yojana (APY) scheme:

Contributions under Atal Bihari Pension Yojana are made on a periodic basis by following a defined pension plan. The contributions are made on a monthly basis and usually range from Rs. 1000 to Rs. 5000. Your contributions to the scheme are dependent on two major factors:

  • A fixed amount of pension you want on a monthly basis
  • And the age at which you become a subscriber of the scheme and start contributing as the pension starts from the age of 60.
  • So, if you are joining the scheme at the age of forty, then you will have to pay the premium till 60 years of age as after that the pension starts.

For a detailed subscriber’s chart, you can either click on the link mentioned or can refer to the table.

APY contribution chart

If you are joining the scheme at the age of 18, then your monthly contributions would be less and the contribution period would be the longest. If you are becoming a subscriber at the age of 40, then your contribution period would be till you reach 60, i.e, 20 years.


Limitation on government contributions:

If you are a part of any of the social security schemes mentioned below, then you are not entitled to receive government contributions under this scheme:

  • Seamens’ Provident Fund Act, 1966.
  • The Coal Mines Provident Fund and Miscellaneous Act, 1948.
  • Employees’ Provident Fund & Miscellaneous Provision Act, 1952.
  • Assam Tea Plantation Provident Fund and Miscellaneous Provision, 1955.
  • Jammu Kashmir Employees’ Provident Fund & Miscellaneous Provision Act, 1961.
  • Any other social security scheme operating by the statute.

As mentioned above, if you are a part of any of these social security schemes and are a taxpayer, then you do not qualify to receive government contributions under the Atal pension scheme. The government co-contributions are only extended to those people who have valid PRANs (Permanent Retirement Account Number) issued by the PFRDA post receiving confirmation from CRA (Central Record-keeping Agency).


How to become a beneficiary of this scheme?

A prerequisite to becoming a subscriber of this scheme is that you should have a ‘savings account’. If you don’t have a savings account, then it is mandatory that you are opening a savings account to avail the benefits of this scheme. Your savings account could either be with a bank or a post office. The enrollment process started from 1st June 2015 and there is no last date to enroll in this scheme.


Offline mode for registering to Atal Pension Yojana Scheme:

  • Visit the bank/post office where you have your savings account. Upon reaching the desired place, ask for ‘Atal Pension Yojana’ form.

Alternatively you can also download the subscriber registration form online.

APY registration form

This is how your form would look like

  • Fill the entire form properly and submit it to the bank/post office. Attach a copy of your aadhaar card with the form for identification purposes. All the fields marked with an asterisk (*) needs to be filled mandatorily.
  • The form contains an ‘acknowledgement section’. You are not supposed to fill this section of the form. Once your registration application has been processed by the bank, the bank will fill the acknowledgement receipt and give it back to you. APY registration
  • Once your application is approved, you will receive a confirmation message on your registered mobile number. That’s why it is imperative to provide the correct mobile number while filing the form.

Online mode of registration to the Atal Pension Yojana Scheme:

  • If you are an internet user and have net banking facility connected to your bank account, then you can simply register for this scheme online.
  • While registering for the scheme online via net banking, you can also opt for ‘auto-debit’ facility. With this, your contributions will automatically be deducted till you turn 60 years old from the age of enrolment. But you have to make sure that your account has sufficient balance every month to make payments for the scheme.
  • Only a few banks offer this online facility. You need to check with your respective banks if they offer this facility via net banking.
  • State Bank of India offers this facility. To know how to enrol for this scheme, read the next section.

How to become a subscriber for Atal Pension Yojana via SBI net banking?

  • To begin with, you need to login to your SBI net banking account. You can visit the online portal of SBI by clicking on this link: https://www.onlinesbi.com/.
  • Under ‘My account’ tab, opt for ‘Social Security Schemes’. This will take you to a new page.
  • You will see a ‘Select scheme’ tab. From the drop-down list, select ‘Atal Pension Yojana’.
  • For the next step, you need to choose your savings bank account that you would like to link with Atal Pension Scheme and then click on submit.
  • After you have clicked on submit, you will see ‘Customer Identification Number’ or CIF. Select the number generated and then again click on ‘submit’.
  • As a result of previous steps, an e-form will be generated on the screen along with instructions on how to fill the e-form. The first section would be of ‘personal details’. Some fields will be pre-filled as these would be the details you must have filled while opening the bank account. Apart from those you will have to fill in additional information like email address, and Aadhaar number. Filing Aadhaar number is not mandatory but it is advisable that you fill the number for the sake of proper identification. For KYC, Aadhaar is the primary document for opening an account under this scheme.
  • Next section of the form is the ‘nominee details’ section. It is important you are choosing the nominee as he/she will get all the accumulated pension amount if you and your spouse die before the age of 60.
  • While proceeding further, you will have to fill in details about your pension scheme, your pension amount, the period of contributions (monthly/quarterly/half-yearly), and the amount being contributed towards the pension.
  • Once you have filled in all the details, submit the form. Your screen will display an acknowledgement receipt. It is advisable that you download the acknowledgement receipt and keep it safe.

It is important to note that subscribing to the AYP scheme online is an easy task but you can’t opt out of the scheme via online means. You will have to visit the home branch of your bank. Opting out of the scheme could be a tiresome process as it involves some paperwork.


Charges and Penalties under Atal Pension Yojana:

If you fail to contribute towards the scheme regularly i.e. on a monthly basis, then you are in for some penalty charged by banks extending scheme registration via online means. This amount is mainly dependent on your monthly contributions to the scheme. Check the chart below to know the penalties:

Penalty per month Contribution per month
Rs. 1 p/m Up to Rs. 100
Rs. 2 p/m Between Rs. 101 to 500
Rs. 5 p/m Between Rs. 501 to 1000
Rs. 10 p/m Beyond Rs. 1001

Consequences of the discontinuation of payments under Atal Pension Yojana:

In case you fail to contribute towards the scheme, the following could happen to your account:

  • If you fail to pay for 6 consecutive months, then your account will be frozen.
  • If you don’t pay your contributions for 12 months, then you account will be deactivated.
  • Your account will be closed if you fail to make payments for 24 months, i.e, 2 years.

How to check your APY (Atal Pension Yojana) account status with PRAN?

You can check your APY account status online. Follow the steps mentioned below to check the details of your APY account.

  • You need to click on the official link of Central Record Keeping Agency : NSDL to access data stored with the government Agency. The home page will resemble the image as shown here under
  • If you don’t pay your contributions for 12 months, then you account will be deactivated.
  • Your account will be closed if you fail to make payments for 24 months, i.e, 2 years. CRA
  • As you can see, you can get the details of your APY account by via two modes, i.e, by using your PRAN number and without your PRAN number.
  • If you choose to retrieve details via your PRAN account, then you will have to fill details like PRAN and your bank account number. Apart from this, you need to select one option from the ‘Views from Subscriber’ drop-down list. Since you are a subscriber, you should click on ‘SOT view’. Check APY subscription with CRA
  • To complete the form, you also need to fill in captcha. Once you have filled in all the details, you can click on ‘submit’. This will give you all the details about your APY account. If you want to see the financials of a particular year, like contributions made in one particular year, then you need to select that financial year.

Check your APY (Atal Pension Yojana) account status without PRAN

  • If you don’t know your PRAN, then you can opt for the second option. If you are searching without PRAN, then you need to enter your name (subscriber’s name), bank account number, and date of birth. Under ‘View for subscribers’, you need to select ‘SOT view’. This option generally gives a glimpse of your ‘statement of transaction’. Check APY subscription without PRAN
  • Post this, you need to fill in the captcha and click on the ‘submit’ button.

So, by using these two option, you can check the status of your APY (Atal Pension Yojana) along with your account statements and any other relevant details.


Mobile alerts: Check Atal Pension Yojana Balance through Mobile

You can also subscribe for SMS alerts to inform you about your account balance, regular contributions and other details related to your Atal Pension Yojana account. For this, it is mandatory that you are registering a valid mobile number to stay updated about your account activities via SMS. You can also check for the due date for making payments, and get updates on the auto-debit facility.


Atal Pension Yojana (APY) Withdrawal process:

Withdrawal procedure is different if you are withdrawing after the age of 60 than withdrawing the pension amount before the age of 60 years.


Withdrawing from Atal Pension Yojana (APY) scheme after the age of 60 years:

Once you have turned 60, you can put in a withdrawal request with your bank or post office. If the subscriber dies after turning 60, then his/her spouse will be entitled to the same pension amount granted on a monthly basis. And if both the subscriber and the spouse dies, then the nominee will get the returns on the pension amount accumulated by the subscriber till the age of 60.

APY death form

Withdrawal before the age of 60 from Atal Pension Yojana (APY) scheme:

Opting out of Atal Pension Yojana on voluntary basis is generally not permitted as per the notification dated 2nd May 2015 which is available on the Pension Fund Regulatory and Development Authority (PFRDA) website. However, it allows early withdrawals for exceptional cases like terminal illness and if the subscriber dies before turning 60. You will have to submit an ‘account closing application’ to your respective bank for closing your account.
You can find account closing form the official government website.
Check the image of the form below for reference purposes.

APY withdrawal form

If you are exiting from the pension scheme voluntarily and you have received Government’s co-contribution in the scheme, then you will only be liable to receive a refund of contributions you have made to the scheme. Along with this, you will receive net actual income generated on your contributions after deducting the account maintenance charges. You will not receive Government’s contribution to the scheme and the amount generated on these contributions.


Difference between Atal Pension Yojana and National Pension Scheme:

Atal Pension Yojana National Pension Scheme
People between the age of 18 to 40 years can join this scheme. Anyone up to the age of 65 years can join this scheme.
NRIs cannot subscribe for this scheme. NRIs can subscribe for this scheme.
Withdrawal before maturity is only allowed in exceptional cases. Subscriber can withdraw money before maturity under this pension scheme.
A unique PRAN number is not a necessity under this scheme. A unique PRAN number is allotted under this scheme for accessibility.
There are five pension slabs under Atal Pension Yojana, i.e, Rs. 1000, Rs. 2000, Rs. 3000, Rs. 4000, and Rs. 5000. Post-retirement pension is dependent on the Pension fund manager. Half of the pension amount is given at the time of retirement and the remaining amount is disbursed on a monthly basis.
There is only one type of account under Atal Pension Yojana. There are two types of account under this scheme: Tier I and Tier II accounts.
No tax benefits are extended under this scheme. One can claim a rebate of up to Rs. 2 lakh under this scheme.
If the accounts are opened before 31st December 2015, you receive a contribution of Rs. 1000 or 50% of your contribution from the government. Subscribers of this scheme receive no contributions from the government.
Atal Pension Scheme only covers the pension of an individual. National Pension Scheme covers extensive areas like returns on investment over a long time, old age security and its extension,low investment risks, and provisional income during old age.
You don’t have a special pension fund manager under this scheme. Under this scheme, there are several pension fund managers like LIC pension fund Ltd, UTI retirement solutions Ltd, HDFC pension management Co.Ltd, and others.

Current scenario of Atal Pension Yojana:

PFRDA (Pension Fund Regulatory and Development Authority) has put in two suggestions regarding the Atal Pension Scheme. These requests are pending with the government. PFRDA was hopeful that government would announce the changes in the interim budget but these suggestions haven’t been acted upon yet. Changes recommended by the PFRDA were:

  • PFRDA wants to increase the monthly slab of Rs. 5000 to Rs. 10,000. This request was based on the feedback acquired from the market. Many people feel that at the age of 60, Rs. 5000 won’t be sufficient keeping in mind the ever increasing prices of all the products.
  • PFRDA also recommends increasing the age bracket for the subscribers. At present, anybody between the age of 18 to 40 years could become a subscriber. PFRDA wants to increase the age to 50 years from 40 years as this would lead to an increase in the subscriber base.

CA Abhishek Soni

Abhishek Soni is a Chartered Accountant by profession & entrepreneur by passion. He is the co-founder & CEO of Tax2Win.in. Tax2win is amongst the top 25 emerging startups of Asia and authorized ERI by the Income Tax Department. In the past, he worked in EY and comes with wide industry experience from telecom, retail to manufacturing to entertainment where he has handled various national and international assignments.