Features of the PM Pension Scheme
Updated On Sep 09, 2022
Table of Contents
Although still a developing nation, India has a sizable labour force. Every year, millions of people start working for the first time. However, there aren't many jobs in the organised sector, so most people are employed in the disorganised sector. There is a lack of agreement on the precise number of people who are engaged outside of the organised sector.
Nonetheless, several government entities estimate that the proportion of individuals who work in the disorganised sector comprises anywhere from 85 to 93% of the overall workforce. Many workers in the informal economy don't have access to a pension or provident fund, leaving them vulnerable in retirement.
Several initiatives have been taken by the government to strengthen the safety net for its citizens. In the beginning, only government workers could join the National Pension Scheme. Later, however, anyone could join. But the PNPY is still the government's most important program to help workers have a secure life in their later years.
What is the Pradhan Mantri Pension Yojana?
People who are employed in the unorganised sector of the country are eligible to participate in the Pradhan Mantri Pension Yojana, which is also known as the Atal Pension Yojana. This programme is supported by the government and aims to provide pension benefits to those individuals. The Pradhan Mantri Pension Yojana is the new version of the Swavalamban Yojana. The Swavalamban Yojana was also meant for workers in the unorganised sector, but it didn't catch on because it didn't guarantee pension benefits at age 60. The Swavalamban Yojana was eventually replaced by the PMPY, which offers a pension of up to Rs. 5,000 per month to any subscribed worker over 60 years of age. The programme is available to all workers under the age of 40.
Features of the PM Pension Scheme
The goal of this pension policy is to help the most vulnerable people in society. However, un - organised workers are not the only ones who can join the scheme. The program is available to everyone and could be a good way for older people to get social security. This pension scheme provides its beneficiaries with a number of advantages:
1. Simplicity
The Pradhan Mantri Pension Yojana, in contrast to its predecessor, is a straightforward and well-organised program that can be comprehended by everyone. It promises every subscriber over the age of 60 up to INR 5,000 per month. In India, based on the subscriber's monthly contribution, employees can receive either INR. 1,000, INR. 2,000, INR. 3,000, INR. 4,000, or INR. 5,000.
2. Eligibility
The minimum requirements for participation in the PMPY have been maintained low so that a wide number of people can benefit from the program's social security protections for the elderly. One only needs an Aadhar card number and a mobile number that is linked to a savings account. A savings account is required, and the person must be between 18 and 40 years old and pay into the scheme for at least 20 years.
3. Death Benefits
If the person who paid into the plan dies, his or her spouse gets the benefits. Under this scheme, the spouse is automatically the person who gets the pension. Upon the death of both the policyholder and his or her spouse, the nominated person will get the pension fund's predetermined corpus for that particular pension slab. If the policyholder dies before turning 60, the spouse can either keep making contributions or take the contributions and any gains that have been made on the corpus.
4. Tax Benefits
Under Section 80CCD of the Income Tax Act of 1961, people who put money into the Atal Pension Yojana can get a tax break. Under Section 80CCD (1B) of the income tax law, you can get tax breaks of up to Rs. 50,000. Section 80CCD (1B) lets you deduct more than Rs. 1.5 lakh per year, which is what Section 80CCE of the law says.
Conclusion
The Pradhan Mantri Pension Yojana is a good choice for millions of people who want to have a safety net financially when they get older. But older people should think about other options in addition to the pension scheme. Putting all your money into just one investment may not be a good idea. Fixed deposits are simple to comprehend and give you a steady return on your money. Those interested in fixed deposits at RBL Bank can do so conveniently and without leaving the house thanks to the bank's convenient online platform.
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