The Atal Pension Yojana (APY), a government-backed pension scheme aimed at providing financial security in old age, has been extended by the Union Cabinet until 2030-31. This decision, made during a cabinet meeting chaired by Prime Minister Narendra Modi, ensures the continuation of the scheme and its associated funding for promotional activities and viability gap coverage.

Launched on May 9, 2015, APY focuses on workers in the unorganized sector, such as laborers, farmers, and small vendors, who often lack access to formal pension benefits. The scheme encourages voluntary savings for retirement and addresses the risk of outliving one's savings. As of January 19, 2026, APY has over 86.6 million subscribers, demonstrating its significant role in India's social security framework.

Who Can Apply?

The APY is available to all Indian citizens who have a savings account in a bank or post office. The minimum age to join the scheme is 18 years, and the maximum age is 40 years. However, individuals who are or have been income tax payers are ineligible to join APY from October 1, 2022. This focuses the scheme's benefits on low-income groups. Enrolment requires an Aadhaar card for KYC.

How Does it Work?

Under APY, subscribers contribute regularly until the age of 60, after which they receive a guaranteed minimum monthly pension. The pension amount can range from ₹1,000 to ₹5,000 per month, depending on the individual's contributions. The contributions are automatically debited from the subscriber's savings account on a monthly, quarterly, or half-yearly basis.

Benefits of APY

• Guaranteed Pension: Subscribers receive a guaranteed minimum monthly pension of ₹1,000, ₹2,000, ₹3,000, ₹4,000, or ₹5,000 after the age of 60 until death.
• Spouse Benefit: After the subscriber's death, the spouse is entitled to receive the same pension amount for the remainder of their life.
• Nominee Benefit: After the death of both the subscriber and the spouse, the accumulated pension wealth is returned to the nominee.
• Flexibility: Subscribers can opt to increase or decrease the pension amount during the accumulation phase, although this option is available only once a year in April.
• Tax Benefits: Contributions to APY are eligible for tax benefits under Section 80CCD(1) of the Income Tax Act, similar to the National Pension System (NPS).

Securing Your Future with a Small Investment

While the contribution amount varies based on the desired pension and the age of joining, even a small monthly contribution can secure a regular income after the age of 60. For example, investing ₹76 monthly for 35 years results in a total investment of ₹31,920. To determine the specific contribution amount required to achieve a targeted pension, individuals can use online APY calculators.

The extension of the Atal Pension Yojana reflects the government's commitment to providing social security and financial inclusion to all citizens, particularly those in the unorganized sector. By investing a small amount regularly, individuals can secure a stable income for their golden years and ensure a financially secure future for their spouses and nominees.