Pradhan Mantri Vaya Vandana Yojana: Government of India scheme.

 The Pradhan Mantri Vaya Vandana Yojana was launched by the Government on 4th May 2017. This is a government pension scheme with an aim to provide social security to senior citizens and for the protection of the elderly against a fall in the interest income due to unfavourable market conditions in the future. This pension scheme can be availed before 31st March 2020 by senior citizens aged 60 years or above.

Some of the highlights of Pradhan Mantri Vaya Vandana Yojana have been discussed in the table below:

Pradhan Mantri Vaya Vandana Yojana
Date of launching	4th May 2017
Department	Department of Financial Services, Government of India
Government Ministry	Ministry of Finance
Activation Period	4th May 2017 to 31st March 2020

Benefits of Pradhan Mantri Vaya Vandana Yojana

Pradhan Mantri Vaya Vandana Yojana (PMVVY) was launched as a government pension scheme for senior citizens which is managed and operated by Life Insurance Corporation (LIC). Some of the major benefits of the scheme are mentioned below:

• The scheme provides an assured return of 8% p.a. payable monthly and is exempted from service tax/GST.
• The scheme offers loan up to 75% of the purchase price after 3 policy years
• The scheme also allows for premature exit for the treatment of any critical/ terminal illness of self or spouse. On such a premature exit, 98% of the Purchase Price shall be refunded.
• If the pensioner dies during the policy term of 10 years, the benefits of the scheme can be availed by the nominee or the beneficiary.
• The benefits of the scheme are overall applicable to the pensioner, his/her spouse and dependents. Eligibility of Pradhan Mantri Vaya Vandana Yojana

  Any individual must fulfil the following criteria for being eligible under Pradhan Mantri Vaya Vandana Yojana:

  • He/she should be 60 years or above to be eligible for the scheme.
  • The policy term should be of 10 years.
  • Investment limit should be Rs. 15 lakh per senior citizen.
  • The minimum pension should be Rs. 1,000/- per month and should not be more than Rs. 10,000/- per month.    

    Frequently Asked Questions related to Pradhan Mantri Vaya Vandana Yojana (PMVVY)

    What is Pradhan Mantri Vaya Vandana Yojana (PMVVY) pension scheme?

    PMVVY scheme is offered only by Life insurance Corporation (LIC) of India. The scheme gives a guaranteed payout of pension at a specified rate for 10 years. It also offers a death benefit in the form of the return of purchase price to the nominee.

    Who can invest in Pradhan Mantri Vaya Vandana Yojana (PMVVY)?

    The applicant must be an Indian citizen. There is no maximum entry age for the Pradhan Mantri Vaya Vandana Yojana (PMVVY) scheme. Also, the applicant must be ready to avail the policy term of ten years. The minimum purchase price is Rs 1.5 lakh, and it offers a monthly pension of Rs 1,000.

    How do I buy PMVVY?

    Individuals can buy Pradhan Mantri Vaya Vandana Yojana both offline and online from Life Insurance Corporation of India. To purchase this scheme through the offline mode, individuals need to approach the nearest or preferred branch of LIC.

    Is Pradhan Mantri Vaya Vandana Yojana (PMVVY) safe?

    As we are living through unusual times amid a pandemic-driven slowdown, you never know, the interest rates may fall further from hereon. Hence, your investment choice should depend on your risk appetite. If you are a risk averse investor looking for a long-term regular income plan, PMVVY should be your first choice. Next comes SCSS and POMIS, followed by bank FDs.

    Is Pradhan Mantri Vaya Vandana Yojana (PMVVY) tax free?

    Pradhan Mantri Vaya Vandana Yojana (PMVVY) scheme does not provide tax deduction benefit under section 80C of the Income Tax Act. Returns from this scheme will be taxed as per existing tax laws. The scheme is exempted from Goods and Services Tax (GST).

    Can any senior citizen open SCSS?

    Senior Citizens Savings Scheme (SCSS) is a government-backed savings instrument offered to individuals aged over 60 years. The maturity period of SCSS is five years. An individual over 60 years of age can open SCSS account.