Last Updated on 5 months ago by Raj Kumar
PMVVY – Pradhan Mantri Vaya Vandana Yojana
Govt of India has launched PMMVY / Pradhan Mantri Vaya Vandana Yojana in 2017 based on the success and popularity of Varishtha Pension Bima Yojana 2003 (VPBY-2003), Varishtha Pension Bima Yojana 2014 (VPBY-2014) schemes, and to protect elderly persons aged 60 years and above against a future fall in their interest income due to the uncertain market conditions, as also to provide social security during old age.
As part of the PMVVY / Pradhan Mantri Vaya Vandana Yojana govt of India is assuring higher interest rates for senior citizens which they can utilise for their retirement income. LIC of India is authorised to offer PMVVY / Pradhan Mantri Vaya Vandana Yojana on behalf of Govt of India.
When it was launched in 2017, the interest rate for PMVVY / Pradhan Mantri Vaya Vandana Yojana was set at 8% which was subsequently reduced to 7.4% in 2020 because of the fall in interest rates and for most of the savings scheme across all different savings options.
In 2020, The Government of India has introduced PMVVY – Pradhan Mantri Vaya Vandana Yojana, with modified rate of pension under this plan and extended the period of sale of this plan for a further period of three years from Financial Year 2020-21 till 31st March, 2023.
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As per the terms and conditions under this plan, guaranteed rates of pension for policies sold during a year will be reviewed and decided at the beginning of each year by Ministry of Finance, Government of India. For the first financial year i.e. upto 31st March 2021, the Scheme will provide an assured pension of 7.40% p.a. payable monthly.
PMVVY – Pradhan Mantri Vaya Vandana Yojana benefits
Below are the benefits of Pradhan Mantri Vaya Vandana Yojana
- Pension Payment :
On survival of the Pensioner during the policy term of 10 years, pension in arrears (at the end of each period as per mode chosen) shall be payable.
- Death Benefit:
On death of the Pensioner during the policy term of 10 years, the Purchase Price shall be refunded to the beneficiary.
- Maturity Benefit:
On survival of the pensioner to the end of the policy term of
Eligibility criteria for PMVVY
Eligibility criteria for Pradhan Mantri Vaya Vandana Yojana are as below:-
- Minimum Entry Age: 60 years (completed)
- Maximum Entry Age: No limit
- Minimum Pension:
- Rs. 1,000/- per month
- Rs. 3,000/- per quarter
- Rs.6,000/- per half-year
- Rs.12,000/- per year
5. Maximum Pension:
- Rs. 9,250/-per month
- Rs. 27,750/-per quarter
- Rs. 55,500/-per half-year
- Rs. 1,11,000/-per year
Total amount of purchase price under all the policies under this plan, and all the policies taken under Pradhan Mantri Vaya Vandana Yojana (with UIN 512G311V01 and UIN: 512G311V02) allowed to a senior citizen shall not exceed Rs. 15 lakhs.
PMVVY minimum and maximum purchase
The scheme can be purchased by payment of a lump sum Purchase Price. The pensioner has an option to choose either the amount of pension or the Purchase Price.
The minimum and maximum Purchase Price under different modes of pension will be as under-
|Mode of Pension||Minimum Purchase Price||Maximum Purchase Price|
|Yearly||Rs. 1,56,658/-||Rs. 1,449,086/-|
|Half-yearly||Rs. 1,59,574/-||Rs. 14,76,064/-|
|Quarterly||Rs. 1,61,074/-||Rs. 14,89,933/-|
|Monthly||Rs. 1,62,162/-||Rs. 15,00,000/-|
The modes of pension payment are monthly, quarterly, half-yearly & yearly. The pension payment shall be through NEFT or Aadhaar Enabled Payment System. The purchase of the policy under this Government subsidised scheme requires unique Aadhaar number validation.
The first instalment of pension shall be paid after 1 year, 6 months, 3 months or 1 month from the date of purchase of the same depending on the mode of pension payment i.e. yearly, half-yearly, quarterly or monthly respectively.
PMVVY – Returns calculator- interest rates per Rs 1000
The pension rates for Rs.1000/- Purchase Price for different modes of pension payments are as below:
- Yearly: Rs. 76.60 p.a.
- Half-yearly: Rs. 75.20 p.a.
- Quarterly: Rs. 74.50 p.a.
- Monthly: Rs. 74.00 p.a.
The pension instalment shall be rounded off to the nearest rupee. These rates are age independent.
PMVVY surrender value
The scheme allows premature exit during the policy term under exceptional circumstances like the Pensioner requiring money for the treatment of any critical/terminal illness of self or spouse. The Surrender Value payable in such cases shall be 98% of Purchase Price.
PMVVY loan facility
Loan facility is available after completion of 3 policy years. The maximum loan that can be granted shall be 75% of the Purchase Price. The rate of interest to be charged for loan amount shall be determined at periodic intervals.
PMVVY free lock-in period
If a policyholder is not satisfied with the “Terms and Conditions” of the policy, he/she may return the policy to the Corporation within 15 days (30 days if this policy is purchased online) from the date of receipt of the policy stating the reason of objections.
The amount to be refunded within free look period shall be the Purchase Price deposited by the policyholder after deducting the charges for Stamp duty and pension paid, if any.
FAQ on PMVVY – Pradhan Mantri Vaya Vandana Yojana
Is there any tax benefit under PMVVY?
No there is no tax benefits under 80C if you invest in the PMVVY scheme. Also, the monthly pension that you receive from PMVVY gets added in your total income for the financial year for tax calculations.
Can I invest in both SCSS and PMVVY?
Yes you can invest in both SCSS and PMVVY scheme if your age is more than 60 years.
Is TDS deducted on PMVVY?
No TDS is not deducted in the pension/interest amount that you receive as part of PMVVY investments.
Which is better PMVVY or SCSS?
As of January 2021, PMVVY offers 7.4% p.a interest which is payable monthly and SCSS offers 7.4% interest but the interest amount is not paid monthly. Looking at this PMVVY is better that SCSS.
If you are looking to save tax along with earn higher interest rate then SCSS is a better choice for you.
What is the rate of interest in PMVVY?
As of January 2021 , The interest rate for PMVVY is 7.4% p.a. which is payable monthly.
How safe is PMVVY scheme?
PMVVY is a govt of India sponsored investment scheme specially offered for senior citizens. Since it has backing of govt of India , it is considered as one of the safest investment option for senior citizens .
Who can apply for PMVVY?
Indian senior citizens with age more than 60 years can apply for PMVVY scheme.
Is SCSS and PMVVY same?
No SCSS and PMVVY schemes are not same.
SCSS stands for senior citizens savings scheme. This scheme has a lock-in of 5 years and the investor gets benefits in investing in the scheme only afte 5 years.
PMVVY stands for Pradhan Mantri Vaya Vandana Yojana. This scheme offers pension like feature where the investor gets paid monthly pension.
Both of the schemes currently offer 7.4% p.a. interest rate.