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What is the Trader's Pension Scheme?

IndianMoney.com Research Team | Posted On Friday, June 07,2019, 05:00 PM

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What is the Trader's Pension Scheme?

 

 

The trader’s pension scheme is a social security scheme, approved by the Narendra Modi led NDA government, which would benefit 3 crore traders across India. The scheme is a part of the Prime Minister’s vision to encompass the business sector under a social security program. The main objective of the scheme is to benefit small shopkeepers and businessmen in SMEs and offer financial security during old age.

The trader’s pension scheme was launched on 31st May 2019 and is yet to be implemented. The subscribers to this scheme are promised a monthly pension of Rs 3,000 once they reach the age of 60. The contributions are decided based on factors like enrolment age and the maturity period of the scheme.

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What is the Trader’s Pension Scheme?

Features of Traders Pension Scheme:

  • The scheme encompasses all traders, shopkeepers, retailers and self-employed people. The scheme promises a minimum monthly pension of Rs 3,000 to the beneficiary after attaining 60 years of age.
  • Traders, shopkeepers and retailers who have an annual GST turnover below Rs 1.5 crores are eligible to enrol in this scheme.
  • The monthly contribution towards the scheme is determined based on the age of enrolment of the beneficiary.
  • The most attractive feature of the trader’s scheme is minimal documentation required like Aadhaar card and details of the bank account and the scheme is fully based on a self-declaration.
  • The trader’s pension is a subsidized scheme in which the Central Government contributes an equal amount as subsidy into the subscriber’s pension account each month.

See Also: Pension Plans in India

Eligibility of Trader’s Pension Scheme:

The eligibility criteria that must be fulfilled by the applicants of the scheme are as follows:

  • The applicant must be a resident of India
  • The applicant must belong to the age group of 18-40 years at the time of enrolment to the trader’s pension scheme. The pension will be provided when the beneficiary reaches 60 years of age
  • The scheme encompasses all retailers, traders, small businessman, self-employed individuals and shopkeepers.
  • The applicants must have annual GST turnover below Rs 1.5 Crore. The scheme aims to benefit almost 3 Crore small retailers and traders.
  • The applicant must have Aadhaar card and bank account.

Application Procedure:

The scheme aims to provide social security benefits to the trader community. It’s easy to avail and requires minimal documentation. The scheme is based on a self-declaration and therefore no proof of business is required. The traders can apply online through common services centre (CSC) located across India.

Common services centres are the physical access points that deliver government e-services like public utility services, social welfare schemes, healthcare, financial, educational and agricultural services. CSC is a government initiative which aims to provide online services in remote and rural areas for a digitally empowered society. CSCs can be located using the CSC locator.

See Also: Best Pension Plans In India

Fund Allocation:

The scheme has been launched by the government of India, to bring the trader community under a social security scheme. The business community is a major contributor to the Indian economy. The scheme aims to benefit 3 crore self-employed individuals, shopkeepers, small businessmen, traders and retailers.

The interested individuals can enrol under this scheme, if they fulfil the eligibility criteria specified by the government. The subscriber has to pay a monthly premium amount. The monthly premiums will be determined based on the age of the applicant.

The central government contributes an equal amount to the pension account of the subscriber. For example, if the subscriber is 29 years of age, then he has to pay Rs 100 a month in his pension account. The central government also contributes an equal amount to the subscriber’s pension account each month.

See Also: Financial Plans For Retirement Benefits

How Does The Scheme Work?

The scheme works just like any other pension scheme, where the amount accumulates over a pre-specified time period. The funds contributed by the subscriber as well as the central government get accumulated. The account earns interest across the tenure of the trader’s pension scheme. The funds accumulated are offered as monthly pension, when the subscriber reaches the age of 60 years.

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