As it was promised by Ministry Of Finance, during the Budget 2017, the Government has announced Pradhan Mantri Vaya Vandana Yojana (PMVVY). This is available from LIC with 8% guaranteed pension plan.
Let us see the features of this scheme.
Note:-Budget 2018-Effective from 1st April 2018, the limit of investment under this scheme raised to Rs.15,00,000 from the existing Rs.7,50,000. Also, the investment date was extended up to 31st March 2023.
# Minimum Age at entry should be 60 Yrs of age.
# There is no maximum age limit set.
# The monthly pension will be 8%. The effective rate will be 8.3%.
# The pension period or policy term is 10 Yrs.
# Minimum pension per month is Rs.1,000, quarterly is Rs.3,000, half yearly is Rs.6,000 and yearly is Rs.12,000.
# Maximum monthly pension in this plan is monthly Rs.5,000, quarterly Rs.15,000, half yearly Rs.30,000 and yearly Rs. 60,000.
# This plan will be available for sale from LIC of India. You can buy Pradhan Mantri Vaya Vandana Yojana (PMVVY) either through online or offline. But LIC is the only insurance company which will sell this.
# You can buy this plan from 4th May 2017 to 3rd May 2018. Therefore, this plan is a limited period pension plan.
# You can surrender this policy during the policy period under certain exceptional circumstances like pensioner requires money for treatment of any critical/terminal illness of self or spouse. Surrender value payable will be 98% of the purchase price.
# You can avail the loan facility after completion of 3 policy years. The maximum loan payable will be 75% of the purchase price. Interest on the loan will be recovered from the pension amount.
# If the pensioner suicide during the policy period, then his nominee or legal heirs will receive the full purchase price.
# The pension will be directly credited to your savings account using NEFT facility or Aadhaar Enabled Payment System.
# Pension is payable at the end of each period, during the policy term of 10 years, as per the frequency of monthly/ quarterly/ half-yearly/ yearly as chosen by the pensioner at the time of purchase.
# The scheme is exempted from Service Tax/ GST.
This is an immediate pension plan. This means if you invest in this plan, your pension will start from the next month itself. Below is the chart of the minimum and maximum investment under this plan.
Do remember that this ceiling of minimum and maximum pension is to the whole family. Here, the meaning of family means self, spouse, and dependents.
The ceiling of maximum pension is for a family as a whole, the family will comprise of pensioner, his/her spouse and dependents.
The benefits of this plan are as below.
# During the policy period
The pensioner will receive the monthly, quarterly, half-yearly or yearly pension as he has opted during the time of buying.
# Death Benefits
On the death of the pensioner during the policy term, the Purchase Price will be refunded to the nominee (or legal heirs in absence of nominee).
# Maturity Benefits
If the pensioner survives up to the end of the policy term, Purchase Price and final installment of the pension will be paid to the pensioner.
The deposits made in the scheme are exempt from income tax under section 80C of Income Tax Act, 1961. However, the interest-earning is taxable income for you. Also, TDS is applicable for such interest income.
As usual, only a few positives but includes many negatives. Let us see the review one by one.
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View Comments
i have invested in Pradhan Mantri Vaya vandana Yojna with LIC, New Delhi Branch. After a year I am planning to shift to Bangalore. So, can I transfer my this PMVVY to any LIC Branch in Bangalore. Please advice.
Hi sir,
I am your regular follower, u article will be indepth at correct time.
Is this scheme extended?
I searched for it but didnt get update my parents turned 60 this April
Dear Parthiban,
As of now, there is no extension notification from Government. Let us wait for the same.
Dear Laxmikanth,
Yes.
Is there a live certificate to be submitted every year? If yes how can I download the form? Where should I send the certificate to?
Dear Manjula,
I think so. Because it is a senior citizen product. You better be in touch with regional LIC Office.
There is no notification or circular regarding 80C deduction in any of the official government website. can you provide any information regarding on 80C notification/ Circular?
Dear Alok,
You can refer the Government notification on the same.
You refer to "this circular of min of fin," for TDS. It is not a circular. It is written reply to a question by min of fin. Comments for TDS are in context of Sr. Ctzn. Save. Sch. and not VVY. It seems there is thorough confusion regarding TDS. If you can seek expert opinion and let your readers know it, it will be highly appreciated.
Thanks.
Dear Mahesh,
Surely.
Army personnel retire earlier than the age of 60 . Are they entitled to invest in this plan ?
Dear Saumitra,
As per my knowledge, there is no such relaxation for army personnel.
I am 70 years old and Become NRI Recently.i have oci also can I invest in this yojana?
Dear Girish,
In my view NO. However, I suggest you to clear the same from nearest LIC Branch as there is no clarity in this regard.
Sir,
1) Whether the interest rates will be revised for the earlier investment?
We have invested in this scheme assuming that we will get 8.30 % interest during tenure of this scheme.
2) Whether this scheme is alive till March 2020?
Kindly clarify
Arunbhai-1) NO.
2) Yes, I already mentioned the same in above post.
Hello sir,
Thanks for the informative blog. I am an NRI and want to withdraw my India EPF and invest it in PMVVY for my senior citizen parents based in India. Can I do this? Is there any tax implication or any other thing which I need to look at?
Regards,
Nitin Garg
Nitin-Yes you can do it. Check the applicability of tax for your EPF (less than 5 years means it will be taxable income for you).
SIR,
I AM RETIRED PERSON HAVING AGE OF 67 YEARS. I HAVE INVESTED AN AMOUNT OF RS. 7.5 LACS IN PMVVYOJNA ON 23.08.2017. I WANT TO KNOW WHETHER THIS INVESTMENT QUALIFY FOR TAX BENEFIT UNDER SECTION 80C OF INCOME TAX ACT. SECONDLY, ACCORDING TO RECENT UNION BUDGET, MAXIMUM AMOUNT OF INVESTMENT IS RAISED FROM 7.5 LACS TO 15 LACS INTO PMVVY AND EFFECTIVE FROM APRIL, 2018 ONWARD. KINDLY LET ME KNOW ABOUT THE ABOVE .
THANKS AND REGARDS,
Lakhvinder-I already explained about Sec.80C benefit and investment in this scheme. Hence, please refer the post properly. Yes, the limit now raised to Rs.15 lakh from the earlier Rs.7.5 lakh.
I WANT TO KNOW WHETHER THIS PARTICULAR INVESTMENT QUALIFIED UNDER SEC 80C OF INCOME TAX ACT. PL REPLY ME IN YES OR NO.
Lakhvinder-YES. I already clarified the same in above post.
CHECK ABOUT TDS. IT IS NOT THERE.
Desai-It may not be there. But do you feel avoiding TDS means avoiding TAX??