How to Check Old Age Pension: A Step-by-Step Guide

2024-02-26

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Retirement is when you can finally relax and unwind after years of hard labour. However, a comfortable life after retirement requires careful financial planning. Early and systematic financial preparation guarantees a consistent income in old age and helps you maintain a pleasant life. One important element of financial planning is the old age pension. An old age pension will give your family a constant sense of security. Buying an old age pension plan can help you save enough for retirement and ensure your family's financial stability.

If you have already invested in an old age pension plan, checking its status has become easier now with online access and readily available information.

In this blog, we will discuss what an old age pension is, how to apply for it, and how to check old age pension status online.

Key Takeaways

The Old Age Pension Scheme offers monthly financial assistance to senior citizens, helping them meet basic needs post-retirement.
This pension is primarily aimed at economically weaker seniors who have no regular income or financial support.
The scheme is implemented by state governments, and eligibility criteria may vary across states.
Beneficiaries can check their pension status online via state-specific portals, making the process more transparent and accessible.
Regular status checks help ensure timely disbursement and resolve any payment-related issues early.

What is an Old Age Pension?

With an old age pension plan, you can invest a portion of your savings for a predetermined period of time. It also aids in the development of a corpus during retirement. The National Pension Scheme (NPS) commenced on 1 January 2004 and is overseen by the Pension Fund Regulatory and Development Authority (PFRDA) and the central government. It is the preferred option for most Indians.

How Does an Old Age Pension Work?

The old age pension plan requires the investors to contribute some of their savings. The PFRDA managers subsequently allocate these funds to shares, debentures, and government bonds.

You can invest your savings in various ways when investing in NPS. The Auto Choice option will be where your money is invested if you want to make auto-payments, It has three different categories.

Aggressive Life Cycle Fund
Moderate Life Cycle Fund
Conservative Life Cycle Fund

In addition to the auto-pay option it has an Active Choice option, where you can invest in

Asset Class E (equity market instruments)
Asset Class C (investments in fixed-income instruments barring government securities)
Asset Class G (investment in government securities)
Asset Class A (alternative investment schemes)

You can invest any type of financial instrument in C or G asset classes, up to 50% of your wealth in asset class E, and up to a maximum of 5% in asset class A. Now that you know some rules about old-age pension plans, here is what you must know about old-age pension rules related to a government employee.

The Formula for NPS Calculation is:

Maturity value (MV) = P x (1 + R/N) ^ NT

Where,

P = Principal invested,

R = Assumed rate of return or the expected rate of return,

N = The Number of times the growth rate compounds, and

T = The Tenure of the investment

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Who Can Apply For an Old Age Pension?

According to the National Pension Scheme, people from all corporate or government sectors are eligible for the NPS. This will help you to secure your future post-retirement. The minimum eligibility period for receipt of a pension is 10 years. A central government servant retiring in accordance with the Pension Rules is entitled to receive a pension on completion of at least 10 years of qualifying service.

How to Apply For an Old Age Pension?

Here is a comprehensive, step-by-step instruction to apply for the old age pension scheme:

Obtain an application form from your local Social Welfare Department.
Complete the application form with all necessary information. It includes the address proofs such as State, District, and Block details; panchayat name, beneficiary and heirs, house number. Further identification proofs like gender, age and date of birth, details of the birth certificate. It also asks for your annual income and domicile certificate, and the EPIC number (voter ID number).
Send the application and all supporting documentation to the Tehsil Social Welfare Officers in charge. An applicant from an urban location can send their application directly to the District Social Welfare Officer in question.
The concerned officers will check the application.

Further, let us understand how to check your old age pension application status.

Did You Know?

In 2024, Uttar Pradesh provided ₹1,000 monthly pensions to over 56 lakh senior citizens, marking a significant increase in support for the elderly.

Source: TOI

How to Check Old Age Pension Status Online?

You can follow these easy steps to get detailed information on old age pension tracking:

Go to your state's pension website
Add the Permanent Retirement Account Number (PRAN) and the financial year.
Click on the search button. You will get the details of your old-age pension scheme

The National Pension Scheme subscribers can check their balance from the NSDL portal. They can check their pension corpus and the current valuation online. You have to log into your account using your login ID, password provided by the Central Record Keeping Agency (CRA), and PRAN Kit.

For further information head to the PFRDA (Pension Fund Regulatory and Development Authority) official website.

Does Old-Age Pension Scheme Offer Tax Benefits?

Under Section 80C of the Income Tax Act of 1961, premiums paid towards an old age pension plan are eligible for a tax benefit. In addition, there exist further parts of the Income Tax Act, namely 80CCC and 80CCD that grant tax benefits.

1. Employee tax benefits on self-contribution

Tax deduction under section 80 CCD(1) of up to 10% of pay (Basic + DA), with a maximum of ₹1.50 lakh total under section 80 CCE.
Tax deduction up to ₹50,000 under section 80 CCD(1B), in addition to the ₹1.50 lakh total cap under section 80 CCE.

2. Tax benefits on employer contributions

Allowed to deduct taxes by the employer under Section 80 CCD(2) up to 10% of salary (Basic + DA) (14% if Central Government makes such a contribution) over the ₹1.50 lakh cap stipulated under Section 80 CCE.

3. Tax benefits on self-employed individuals

Tax deduction of up to 20% of their gross income under section 80 CCD (1), with an aggregate threshold of ₹1.50 lakh under section 80 CCE.
Tax deduction up to ₹50,000 under section 80 CCD(1B), in addition to the ₹1.50 lakh under section 80 CCE.

4. Tax benefits on partial withdrawal from the NPS account

Eligible for tax exemption on the amount withdrawn up to 25% of the self-contribution, however subject to the restrictions and limitations that the PFRDA may specify under section 10(12B).

5. Tax benefits on purchasing an Annuity

Eligible for tax exemption on purchase of annuity upon reaching the age of 60 or superannuation under section 80CCD(5). However, section 80CCD(3) imposes taxes on any subsequent annuity income received.

6. Tax benefits on lump sum withdrawal

Eligible for tax exemption on lumpsum withdrawal of 60% of accumulated pension wealth upon reaching the age of 60 or superannuation under section 10(12A).

7. Tax benefits to Corporates/Employers

Eligible for tax deduction on the amount contributed as employer's contribution towards the NPS account of employees, up to 10% of the salary (Basic + DA) of employer's contribution named under 'Business Expense' from the Profit & Loss Account under section 36(1)(iv)(a).

Conclusion

A critical first step in guaranteeing stability and security of your finances during your retirement years is keeping an eye on the status of your old age pension. You can make sure you get the assistance you need by staying up to date on the status of your pension payments by following the detailed guidance provided in the guide. Always check your pension status on a regular basis, and if there are any problems or inconsistencies, get in touch with the appropriate authorities or support services.

Glossary

Old Age Pension: A government scheme providing monthly financial aid to eligible senior citizens with no stable income.
Beneficiary: A person who receives benefits or payments from a government scheme or insurance policy.
PRAN (Permanent Retirement Account Number): A unique ID used to manage and track pension-related information.
Disbursement: The process of paying out money, such as pension funds, to eligible beneficiaries.
State Portal: An official government website through which citizens can access services like pension status updates.

FAQs

Disclaimer - This article is issued in the general public interest and meant for general information purposes only. The views expressed in this blog are solely those of the writer and do not necessarily reflect the official policy or position of Canara HSBC Life Insurance Company Limited or any affiliated entity. We make no representations or warranties of any kind, express or implied, about the completeness, accuracy, reliability, suitability, or availability with respect to the blog or the information, products, services, or related graphics contained in the blog for any purpose. Any reliance you place on such information is therefore strictly at your own risk. You should consult with a qualified professional regarding your specific circumstances before taking any action based on the content provided herein.

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