Everything You Should Know about Atal Pension Yojana Age Limit
Atal Pension Yojana (APY) is a pension scheme for people working in unorganised sectors. People with a low income and those not enrolled in other Statutory Social Security schemes can contribute a small monthly amount to an APY account. The Government of India introduced this scheme in 2015 for daily wage earners, construction workers, and other professionals who cannot build a significant retirement corpus due to relatively low wages.
Further, the government of India has also strategically set an age limit for subscription to the APY scheme. It is done with an objective to ensure regular monthly pension receipt post 60 years
Let us go through each aspect of the APY scheme age limit, alongside the features and eligibility criteria for the same.
APY Age Limit
The Atal Pension Yojana age limit for opening an account and starting a contribution is 18-40.
As per the maximum age limit for Atal Pension Yojana, you cannot open an APY account if you have already passed the age of 40. As the pension starts rolling out only after you are 60, the government has set this limit to ensure that you contribute for at least 20 years.
Following are the eligibility criteria to open an APY account:
- Your age must be between 18 and 40 years per the Atal Pension Yojana age limit rules. Indian citizens within this age bracket are eligible to open an APY account with the authorised Point of Presence-Service Provider (POP-SP) or post office.
- You must have a savings account in either bank or post office. Some banks and post offices are authorised POP-SPs, acting as intermediaries between you and the scheme. Along with an APY account, you need a savings account to withdraw the investments and debit to an APY account.
- Your savings account must be active and know-your-customer (KYC) compliant.
- You must have an Aadhar card and a mobile number. Aadhar card details are necessary when opening an APY account, as the government allows only one account per citizen. Moreover, a mobile number is required to receive updates regarding deposits and withdrawals.
- You must not be enrolled with the State or Central Government-aided Statutory Social Security schemes that offer pensions.
- Similarly, you should not be subscribed to company-sponsored pension plans or other pension plans that offer a monthly pension after retirement.
- Your annual income should also be below the taxable limit to qualify for the Atal Pension Yojana.
Features of APY
Safe Investment and Guaranteed Pension
Your investment is safe, and returns are secure because of the backing by the Government of India (GoI). The Pension Fund Regulatory and Development Authority (PFRDA) administers the APY with support from the Government of India (GoI). A subscriber would receive a monthly pension ranging from Rs. 1,000 to Rs. 5,000, depending upon the monthly contribution amount made prior to maturity.
Flexibility in Selecting the Contribution Amount
The pension amount you will receive upon turning 60 depends upon the monthly contribution during the scheme’s tenure. You have the flexibility of increasing and decreasing the contribution at any time during the term. This facility is available once per financial year.
The Government of India (GoI) will contribute 50% of the subscriber’s contribution or Rs. 1,000 per annum, whichever is the lower amount. This facility is available for those who do not have a taxable income and are not part of any Statutory Social Security schemes that offer pensions. Also, Individuals who subscribed to the scheme before March 31, 2016, were eligible for this opportunity.
The minimum age for opening an APY account is 18, and the maximum age limit is 40. The Atal Pension Yojana age limit is set to ensure contributions for a minimum of 20 years.
As per the age limit of Atal Pension Yojana rules, you are eligible for 100% annuitization of the total pension wealth after you turn 60. To begin with, you need to close your APY account; after that, you start receiving a monthly pension from the bank or post office where you opened the APY account. The closure before 60 is allowed only in case of a terminal illness, voluntary exit, or the subscriber’s death. In case of the subscriber’s death before 60, the spouse will be eligible to get the scheme’s benefits. The spouse can either continue the contribution or close the account and avail of the accumulated corpus.
Contributions toward an APY scheme are exempted from tax under Section 80CCD of the Income-tax Act, 1961. Tax exemptions for contributions up to Rs. 1,50,000 per financial year are provided. Furthermore, additional exemptions are offered under Section 80CCD(1B) of the Income Tax Act, 1961, on contributions up to Rs. 50,000 per financial year.
The Government of India launched the Atal Pension Yojana to provide a uniform social security system. The Atal Pension Yojana is an excellent option if you belong to low-income groups with limited funds to build a retirement corpus. The age limit for Atal pension Yojana is set to maintain contributions for upto 20 years. So, check the eligibility criteria and start investing today for a better tomorrow!
Can minors open an APY account under the guidance of parents or legal guardians?
No, minors are not allowed to open an APY account. The minimum age is set at 18 years per the APY age limit rules. On the other hand, 40 is the maximum age limit for you to open an APY account. Either way, the idea is to encourage you to invest for a minimum of 20 years.
Can I open an APY account if I already have a national pension scheme (NPS) account?
Yes, the existing NPS account holders are eligible to open an APY account if they fulfil the Atal Pension Scheme age limit criteria.
How many APY accounts can I open?
You can open only one APY account, and you will not be permitted to run multiple accounts.
What should I do if I want to open an APY account after 40 years of age? Is there any exception to the rules?
As per the current Atal Pension Yojana age limit rules, you cannot open an APY account after you turn 40. There are no exceptions to the age limit rules.
Can I increase the contribution amount at any point during the tenure?
Yes, you can increase or decrease the contribution amount during the tenure. However, this facility is available once per financial year.
Can I withdraw funds from the APY prematurely?
Premature withdrawal of funds is allowed only in cases where you contract a terminal illness or in the event of your untimely demise or voluntary exit before turning 60. If it is the latter, your spouse will be eligible to receive the fund accumulated in the account.
Who is eligible for the Atal Pension Yojana Scheme?
Any citizen of India between 18 to 40 with a savings bank account or post office savings account can sign up for it.