Question 1

What is Atal Pension Yojana (APY)?

Accepted Answer

APY is a government-backed pension scheme for Indian citizens aged 18-40 in the unorganized sector. You choose a monthly pension of Rs 1,000 to Rs 5,000, and the government fixes your monthly contribution based on your age at enrollment. Contributions continue until age 60, after which you receive the guaranteed monthly pension for life.

Question 2

How much pension will I get under APY?

Accepted Answer

APY offers fixed monthly pension options of Rs 1,000, Rs 2,000, Rs 3,000, Rs 4,000, or Rs 5,000 after age 60. The monthly contribution depends on your enrollment age — joining at 18 for Rs 5,000 pension costs just Rs 210/month, while joining at 40 costs Rs 1,454/month. After the subscriber's death, the spouse receives the same pension.

Question 3

Is APY eligible for tax benefits?

Accepted Answer

Yes, APY contributions qualify for tax deduction under Section 80CCD(1) within the overall Rs 1.5 lakh limit of Section 80C. Additionally, an extra deduction of up to Rs 50,000 is available under Section 80CCD(1B) specifically for NPS/APY contributions, making the total deduction potential Rs 2 lakh.

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