Various types of pension and retirement programs are available in India to help the elderly people in their old age where they do not have to work every now and then but still have to pay their medical expenses and other lifestyle expenses. Given below we have shared some of the important specifications regarding the national pension scheme and the Atal Pension Yojana created by the concerned authorities of the Indian Government. We have shared the details regarding the topic of NPS vs APY: Benefits, Difference, Eligibility, Additional Points. We will share our thoughts on the question of Which Is Better NPS Or Atal Pension Yojana?
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NPS vs Atal Pension Yojana
The National pension scheme is a retirement planning scheme that will be offering the beneficiaries market link returns and you have to invest in this scheme till the age of 60 years to get the benefit. There are two different types of investment strategies offered in this program and there are four types of funds available for the beneficiaries. The return in this scheme depends upon the financial market. The Atal Pension Yojana was created by the Indian government to provide guaranteed pensions to low-income group individuals, especially in the unorganised sector. You can get the return interest scheme at 40 years or 60 years. Given below is the table indicating the maturity benefits of the scheme.
| Parameters | NPS Scheme | APY Scheme |
| Maturity benefit | 60% in a lump sum and 40% in annuity payments | A fixed amount of annuity as chosen by the investor |
Eligibility Criteria Of NPS And APY
There are different eligibility criteria that you need to follow in order to apply for the national pension scheme and the Atal Pension Yojana. Given below is the table indicating the eligibility criteria for both of the schemes and the difference between NPS and APY.
| Parameters | NPS Scheme | APY Scheme |
| Age Limit | The applicant must be above the age of 18 years and the applicant must be below the age of 60 years. | The applicants must be above the age of 18 years and the applicant must be below the age of 40 years. |
| Nationality Criteria | Indian residents as well as NRIs | Only Indian residents |
Difference Between NPS And Atal Pension Yojana
Given below we have shared the specific differences between the national pension scheme and the Atal Pension Yojana as presented by the Indian government to help the elderly people of the country. You can easily use the NPS vs APY calculator in order to calculate the maturity benefit and have perfect knowledge regarding the scheme.
| Parameters | NPS | APY |
| Tax Benefits | Investments are allowed as a deduction under Section 80CCD (1), 80CCD (1B) and 80 CCD (2). Pensions paid are taxable in the hands of the investor | Investments are allowed as a deduction under Section 80CCD (1) and 80CCD (1B). Pensions paid are taxable in the hands of the investor |
| Premature Withdrawals | Partial withdrawals are allowed from the third year of investment from a Tier I Account. From the Tier II Account, however, withdrawals can be done anytime. Premature exit from the scheme can also be done in which case 20% of the account balance is paid in a lump sum and the remaining 80% is used to pay annuities. | Not allowed except in case of terminal illness or death of the investor. In such cases too, the entire account balance is paid and the scheme is terminated. |
| Type Of Accounts | Two Accounts are Available, namely Tier I and Tier II Accounts. | One Account Available |
| Investments | Any amount can be invested in the scheme above the minimum criteria. | The investment would depend on age at entry, pension amount selected and the mode of investment. The investment amount is fixed throughout the investment tenure |
| Government Contribution | Only in the case of Government employees @10% of the employee’s salary + dearness allowance | Only for subscribers who do not have a taxable income or subscription to any other social welfare scheme and who have joined the scheme between 1st June 2015 and 31st December 2015. The contribution is done @50% of the investor’s contribution or INR 1000 whichever is lower |
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Both the schemes are providing a lot of different benefits to the elderly people and you can choose a scheme according to the investment that you are making. If you want to make a very small investment plan you can choose the Atal Pension Yojana because it is especially present for the lower income group people. You can choose the national pension scheme if you want to make a large investment. There are a lot of maturity benefits available in both schemes which will help you to lead a happy retirement life without the worry of financial expenses.
