APY Calculator

What is APY (Atal Pension Yojana)?

Atal Pension Yojana (APY) is a government-backed pension scheme launched in May 2015, primarily targeted at workers in the unorganised sector who lack access to formal pension plans. It is administered by the Pension Fund Regulatory and Development Authority (PFRDA) and is open to all Indian citizens between the ages of 18 and 40 who have a savings bank account.

APY guarantees a fixed monthly pension of ₹1,000, ₹2,000, ₹3,000, ₹4,000, or ₹5,000 per month starting at age 60, for life. The same pension is also payable to the spouse after the subscriber's death. Upon the death of both subscriber and spouse, the accumulated corpus is returned to the nominee.

APY Eligibility Criteria

• Age: Must be between 18 and 40 years. APY requires a minimum contribution period of 20 years (hence the upper limit of 40).
• Bank account: Must have a savings bank or post office savings bank account with auto-debit facility.
• Existing pension: From October 2022, any citizen who is or was an income tax payer is not eligible to join APY. The scheme is specifically for non-income-tax-paying citizens.
• Existing NPS: You can hold both an NPS and an APY account simultaneously.

How APY Contributions Work

Your monthly contribution is fixed at the time of enrollment based on your entry age and your chosen pension amount. The contribution is automatically debited from your savings account each month. Unlike market-linked instruments, APY contributions are calibrated to deliver a guaranteed pension regardless of market performance — the government makes up any shortfall in returns.

If the investment returns from APY contributions exceed what is needed for the guaranteed pension, the excess accumulation is passed on to the subscriber in the form of enhanced pension or a larger return of corpus to the nominee.

APY Tax Benefits

APY contributions qualify for tax deduction under Section 80CCD(1) of the Income Tax Act, within the overall ₹1.5 lakh limit under Section 80C. This applies to the old tax regime. Under the new tax regime, no deduction is available for APY contributions.

In addition, if you qualify for the government co-contribution benefit (available to eligible subscribers enrolled before March 2016 with specific income criteria), the government contributes 50% of the subscriber's contribution (up to ₹1,000 per year) for 5 years, boosting your effective returns significantly.

APY Nominee and Death Benefits

APY provides strong protection for the subscriber's family:

• On the death of the subscriber after age 60, the same pension amount continues to be paid to the spouse for their lifetime.
• On the death of both subscriber and spouse, the entire accumulated pension corpus (the corpus equivalent used to generate the pension) is returned to the nominee.
• On the death of the subscriber before age 60, the spouse can either continue contributing and inherit the account (receiving the same pension at 60), or exit and receive the accumulated corpus with returns.

Advantages of APY

• Guaranteed pension: Unlike NPS or mutual funds, APY guarantees a fixed monthly pension amount regardless of market conditions. There is no investment risk for the subscriber.
• Very low contribution for early enrollees: A subscriber who enrolls at age 18 for ₹5,000/month pension pays only ₹210/month — an extremely affordable way to secure a lifetime pension.
• Government backing: The scheme is managed by PFRDA with a government guarantee. There is zero counterparty risk.
• Automatic savings discipline: Auto-debit ensures you never miss a contribution. This makes APY an effortless way to build a guaranteed retirement income.
• Lifetime pension for spouse: The continuation of pension to the spouse provides financial security for the entire family, not just the subscriber.
• Return of corpus to nominee: Your family does not lose the accumulated corpus — on the death of both subscriber and spouse, the full pension corpus goes to the nominee.