Atal Pension Yojana Vs National Pension System: All you need to know

Atal Pension Yojana is a government scheme administered by PFRDA through NPS architecture.

New Delhi: Atal Pension Yojana and National Pension System are government scheme, administered by the Pension Fund Regulatory and Development Authority.

The APY will be applicable to all citizens, especially those in the unorganised sector who do not have any formal pension provision.

Here all you need to know about the Atal Pension Yojana and the National Pension System

- APY is a government scheme administered by PFRDA through NPS architecture. The minimum age of joining APY is 18 years and maximum age is 40 years. Therefore, minimum period of contribution by the subscriber under APY would be 20 years or more. The maximum age of joining the NPS has been increased from 60 years to 65 years and continue up to the age of 70 year.

- Atal Pension Yojana (APY) is open to all bank account holders who are not members of any statutory social security scheme.  

- Under NPS account, two sub - accounts – Tier I and II are provided. Tier I account is mandatory and the subscriber has option to opt for Tier II account opening and operation. Tier - II account is a voluntary savings facility available as an add - on to any Tier - 1 account holder. Subscribers will be free to withdraw their savings from this account whenever they wish.

- In NPS, a subscriber has to make a minimum annual contribution of Rs 6000-for Tier I account and Rs  2000 for Tier II account in a financial year.

- APY has pre-defined monthly contributions. Under the APY, the subscribers would receive the fixed pension of Rs. 1000 per month, Rs. 2000 per month, Rs. 3000 per month, Rs. 4000 per month, Rs. 5000 per month, at the age of 60 years, depending on their contributions, which itself would vary on the age of joining the APY.

- The Government does not make any contribution to your NPS account. Under APY, the Central Government would co-contribute 50 percent of the subscriber’s contribution or Rs 1000 per annum (whichever is lower) to each eligible subscriber account, for a period of 5 years, i.e., from 2015-16 to 2019-20, who join the NPS before 31st December, 2015.

- Individuals who are employed and contributing to NPS would enjoy tax benefits on their own contributions as well as their employer’s contribution under Section 80 CCD and  80 CCE. APY subscribers also enjoy the same income tax benefits as NPS.