Atal Pension Yojana Exit: Withdrawal Rules & Process

What is Atal Pension Yojana Exit?

Atal Pension Yojana (APY) is a government-backed pension scheme that provides guaranteed monthly pension of ₹1,000 to ₹5,000 after the subscriber turns 60. However, there are situations where you may need to exit the scheme — either at maturity (age 60), due to premature closure, or in the event of the subscriber's death.

This guide covers all exit scenarios, refund rules, and the step-by-step process for closing your APY account.

Disclaimer: CitizenNest is an independent informational platform and is not affiliated with the Government of India.

Exit Scenarios

1. Normal Exit at Age 60

When the subscriber turns 60:

• Monthly pension of ₹1,000 to ₹5,000 (as chosen) begins
• Pension is credited to the subscriber's bank account every month
• After the subscriber's death, the spouse receives the same pension
• After both subscriber and spouse pass away, the accumulated corpus is returned to the nominee

You don't need to do anything — the pension starts automatically once you turn 60. Ensure your bank account and nomination details are up to date.

2. Voluntary/Premature Exit (Before Age 60)

Premature closure is allowed under certain conditions:

• Only the subscriber's own contribution plus the net actual interest earned is returned
• Government co-contribution (if any) and the interest earned on it are not refunded
• Premature exit is permitted at any time by submitting a closure request at the bank

Important: The government discourages premature exit. You will receive significantly less than the guaranteed pension corpus.

3. Exit Due to Death of Subscriber

Before age 60:

• The spouse can choose to:
  • Continue the APY account for the remaining period and receive pension at 60, OR
  • Close the account and receive the accumulated corpus
• If there is no spouse, the nominee receives the accumulated corpus

After age 60 (during pension phase):

• The spouse receives the same monthly pension
• After the spouse's death, the nominee receives the accumulated corpus

4. Exit Due to Terminal Illness

If the subscriber is diagnosed with a terminal illness, premature closure is allowed. The subscriber receives the accumulated corpus (own contribution + interest earned).

5. Default/Involuntary Closure

If contributions are not paid:

• After 6 months: Account is frozen
• After 12 months: Account is deactivated
• After 24 months: Account is automatically closed
• Only the subscriber's own contribution minus applicable charges is refunded

Refund Rules Summary

Documents Required for Exit

For premature closure:

• APY account closure form (available at the bank)
• PRAN (Permanent Retirement Account Number)
• Bank passbook or account details
• Aadhaar card
• Identity proof (if required by the bank)

For closure due to death:

• Death certificate of the subscriber
• PRAN of the subscriber
• Spouse/nominee's Aadhaar card
• Spouse/nominee's bank account details
• APY closure/claim form
• Relationship proof (if nominee)

Step-by-Step Process: Premature Exit

1. Visit your bank branch where your APY account is maintained
2. Request the APY closure form (or APY-SP — Subscriber Premature closure form)
3. Fill in the form with your PRAN, bank account details, and reason for closure
4. Submit the form along with Aadhaar copy and bank passbook
5. The bank will process the closure within 15-30 working days
6. The refund amount (own contribution + net interest) will be credited to your bank account

Step-by-Step Process: Claim After Death

1. Spouse/nominee visits the bank branch with the required documents
2. Submit the APY claim form along with:
   • Death certificate (original + copy)
   • PRAN of the deceased subscriber
   • Nominee/spouse's identity and bank details
3. Spouse chooses to either continue the account or close it
4. If closing, the accumulated corpus is credited within 15-30 working days

Processing Time

Important Tips

1. Think carefully before premature exit — you lose the government co-contribution and the power of compounding over decades
2. Keep your nominee details updated — visit the bank to update if your family situation changes
3. Ensure your spouse's bank details are on file so pension transfer is seamless after your passing
4. Maintain sufficient balance in your account to avoid involuntary closure due to non-payment
5. Download the UMANG app to check your APY account status and balance anytime

Frequently Asked Questions

Can I exit APY at any time before 60?

Yes, voluntary premature exit is allowed. However, you will only receive your own contributions plus the net interest earned. Government co-contribution (if any) will not be refunded.

What happens to my APY account if I stop paying contributions?

After 6 months of non-payment, the account is frozen. After 12 months, it is deactivated. After 24 months, the account is permanently closed and you receive only your contributions minus charges.

Can my spouse continue my APY account after my death?

Yes, if the subscriber dies before 60, the spouse has the option to either continue the APY account for the remaining period or close it and receive the accumulated corpus.

Is the APY refund amount taxable?

The lump-sum amount received on closure or by the nominee is generally not taxable. However, the monthly pension received after 60 is taxable as per your income tax slab. Consult a tax professional for your specific situation.

How do I check my APY account balance before deciding to exit?

You can check your balance through your bank's net banking, the UMANG app, or by calling the NPS helpline at 1800-110-708 (toll-free).

Can I reopen my APY account after premature closure?

Yes, you can open a new APY account after premature closure, provided you still meet the eligibility criteria (age 18-40, valid bank account, not an income tax payer).

For details on how to apply for APY, see our Atal Pension Yojana Apply guide. Check our PAN card guide for tax-related documentation.