Atal Pension Yojana (APY)
Calculate the monthly contribution required for your desired pension.
You need to pay this amount every month for 35 years.
Atal Pension Yojana (APY) is a social security scheme aimed at providing a defined pension to the unorganized sector. Depending on your contribution, you get a guaranteed pension of ₹1000, ₹2000, ₹3000, ₹4000, or ₹5000 per month after age 60.
Why Join APY?
The biggest advantage is the Government Guarantee. If the actual returns on the corpus are lower than assumed, the Govt of India funds the shortfall to ensure you get the promised pension.
How your contribution is decided
APY works backwards from the pension you want. You pick a slab — ₹1,000, ₹2,000, ₹3,000, ₹4,000 or ₹5,000 a month — and the scheme calculates the contribution needed for your corpus to support it by age 60. The single biggest factor is your age at joining: the earlier you start, the longer your money compounds and the smaller each instalment needs to be.
| Joining age | Monthly contribution for ₹1,000 pension | For ₹5,000 pension |
|---|---|---|
| 18 years | ₹42 | ₹210 |
| 25 years | ₹76 | ₹376 |
| 30 years | ₹116 | ₹577 |
| 35 years | ₹181 | ₹902 |
| 40 years | ₹291 | ₹1,454 |
The gap is stark: joining at 18 costs roughly one-seventh of what joining at 40 costs for the same ₹5,000 pension. Contributions can be debited monthly, quarterly or half-yearly from your linked savings account.
Eligibility and the income-tax exclusion
- Any Indian citizen aged 18 to 40 with a savings bank account and valid Aadhaar.
- Since 1 October 2022, anyone who is or has been an income-tax payer is not eligible to enrol — the scheme is now targeted squarely at the unorganised sector.
- One account per person; enrolment is through your bank or post office.
What happens to your family
APY is structured as a household pension, not an individual one. After the subscriber's death the same pension continues for the spouse for their lifetime, and once both have died the entire accumulated corpus is returned to the nominee. That combination — guaranteed pension, spouse continuation, and corpus return — is what makes it different from a simple annuity purchase.
Missed contributions and exit rules
Because contributions are auto-debited, the practical risk is an underfunded bank account. Missed instalments attract a small penalty (roughly ₹1 to ₹10 per month depending on contribution size), and sustained default escalates: the account is frozen after 6 months, deactivated after 12, and closed after 24. Voluntary exit before 60 is permitted, but you receive only your own contributions plus accrued returns — the government co-contribution and guarantee do not apply on early exit.
Frequently Asked Questions
What is the age limit for Atal Pension Yojana?
The entry age is 18 to 40 years, and the pension begins at 60. Because the corpus must build up by 60, joining later means a much higher monthly contribution for the same pension slab — joining at 40 costs roughly seven times what joining at 18 costs for a ₹5,000 pension.
Can I exit APY before 60?
Yes, voluntary exit is permitted. You receive your own accumulated contributions plus the returns earned on them, but the government co-contribution and the pension guarantee do not apply on early exit — so exiting early forfeits the main benefits of the scheme.
How much do I need to contribute for a ₹5,000 pension?
The contribution depends entirely on your joining age, because the corpus has to build up by 60. Joining at 18 requires roughly ₹210 a month for the ₹5,000 pension slab; joining at 30 requires roughly ₹577; joining at 40 requires roughly ₹1,454. Enter your age in the calculator above to see the exact figure for each pension slab.
Who is eligible for Atal Pension Yojana?
Any Indian citizen aged 18–40 with a savings bank account and a valid Aadhaar. Since October 2022, anyone who is or has been an income-tax payer is not eligible to join. APY was designed primarily for workers in the unorganised sector.
What happens to APY after the subscriber dies?
The same pension continues for the spouse for their lifetime. After both the subscriber and spouse have died, the entire accumulated corpus is returned to the nominee — so the scheme covers the family, not just the subscriber.
Is APY contribution eligible for tax deduction?
Yes. Contributions qualify for deduction under Section 80CCD(1B) up to ₹50,000, over and above the ₹1.5 lakh Section 80C limit, under the old tax regime. Note, however, that current income-tax payers are no longer permitted to enrol in the scheme.
What if I miss an APY contribution?
Contributions are auto-debited from your bank account, and a missed payment attracts a small penalty (₹1 to ₹10 per month depending on the contribution size). Prolonged default can lead to the account being frozen after 6 months, deactivated after 12 months and closed after 24 months, so keeping the linked account funded matters.
Is APY better than NPS?
They serve different purposes. APY guarantees a fixed pension of ₹1,000–₹5,000 a month with a government backstop, which suits lower-income savers who need certainty. NPS has no cap and no guarantee — your pension depends on market returns — which suits those who can invest more and accept market risk for potentially higher retirement income.
Related Calculators
NPS Calculator
Plan your retirement corpus and pension under the National Pension System.
EPF Calculator
Calculate the accumulated corpus in your Employees' Provident Fund.
Gratuity Calculator
Estimate the gratuity amount you are eligible to receive after 5 years.
SWP (Monthly Income)
Plan systematic withdrawals to generate a steady monthly income.
