Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a Pension Scheme announced by the Government of India exclusively for the senior citizens aged 60 years and above which is available from 4th May, 2017 to 31st March, 2020.
Benefits of the scheme
Following are the major benefits under the Pradhan Mantri Vaya Vandana Yojana (PMVVY):
- Scheme provides an assured return of 8% p.a. payable monthly (equivalent to 8.30% p.a. effective) for 10 years.
- 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.
- On survival of the pensioner to the end of the policy term of 10 years, Purchase price along with final pension installment shall be payable.
- Loan upto 75% of Purchase Price shall be allowed after 3 policy years (to meet the liquidity needs). Loan interest shall be recovered from the pension installments and loan to be recovered from claim proceeds.
- The scheme also allows for premature exit for the treatment of any critical/ terminal illness of self or spouse. On such premature exit, 98% of the Purchase Price shall be refunded.
- On death of the pensioner during the policy term of 10 years, the Purchase Price shall be paid to the beneficiary.
- The ceiling of maximum pension is for a family as a whole, the family will comprise of pensioner, his/her spouse and dependants.
- The shortfall owing to the difference between the interest guaranteed and the actual interest earned and the expenses relating to administration shall be subsidized by the Government of India and reimbursed to the Corporation.
Utility Desk: Prime Age Vandana Yojana (PMVVY) has been launched for senior citizens. This is a pension scheme for citizens 60 years and older. The benefit of this scheme can be availed by depositing the amount together. The investment period is till March 31, 2020. Under this scheme, senior citizens are entitled to a monthly pension option with a guarantee of return of at least 8% for 10 years. If you opt for an annual pension, you will get a refund of 8.3% for 10 years. The scheme is exempt from GST.
Up to Rs 15 lakh can be invested
The scheme has been implemented in collaboration with LIC so that senior citizens do not have to travel much and can easily understand the process. A maximum of Rs 15 lakh can be invested in it. At Rs 15 lakh, you will get a pension of Rs 10,000 per month.
Important matters regarding the plan
Income Tax: The amount deposited in this scheme under Section 80C of the Income Tax Act, 1961 is completely tax free. However, the policyholder will have to pay income tax on the interest earned from the deposit.
Interest Fund: If you want to withdraw your pension every month, you will get 8% interest. If you want to withdraw the entire amount of pension once a year, the interest will go up to 8.3 per cent.
Spouses: The investment limit in the scheme is per senior citizen, not per family. If the couple wants, they can invest Rs 30 lakh.
Payment Option: The term of the policy is 10 years. You have the option of making quarterly, half-yearly or annual payments every month.
Medical examination is not required: No policyholder is required to undergo a medical examination to avail benefits under this scheme.
Understand with this example: You have invested 1 lakh 50 thousand rupees in this scheme and if you want to withdraw money every month, you will get 1000 rupees per month. That is 12 thousand rupees in a year. But if you want an annual pension, you will get Rs 12,450 per year.
When will the deposit amount be received: After investing in the scheme for 10 years, the deposit amount is refunded along with the final payment of the pension. If the pensioner dies within 10 years of purchasing the scheme, the deposit amount is paid to the nominee.
What documents are required?
To invest in PM Vandana Yojana you have to submit the following documents along with the form. A copy of PAN card, copy of address proof (Aadhaar, passport etc.), copy of check or first page copy of bank passbook should be given. So that the pension money can come into your account.
Where to invest in the scheme?
The government has tied up with LIC for the scheme. Therefore, the LIC office or LIC agent can be found to invest in this scheme. For more information regarding the scheme you can call on 022-67819281 or 022-67819290. LIC has also issued a toll free number for this. You can get information about this scheme by calling 1800-227-717.
Exclusion
Suicide: There shall be no exclusion on count of suicide and full Purchase Price shall be payable.
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