Pradhan Mantri Vaya Vandana Yojana (PMVVY) 2017-18 – Complete Details

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Pradhan Mantri Vaya Vandana Yojana

Pradhan Mantri Vaya Vandana Yojana

The Central Government of India has announced that a new pension scheme named PMVVY (Pradhan Mantri Vaya Vandana Yojana) would be launched in budget 2017-18 for Senior Citizens with a guaranteed rate of return.

What is Pradhan Mantri Vaya Vandana Yojana

The Pradhan Mantri Vaya Vandana Yojana is similar to Varishtha Pension Bima Yojana (2014) Scheme which was launched during 2014-15.

This scheme is announced for Indian Citizens aged 55 years and above. This scheme was firstly introduced in the Union Budget 2003-04 (Atal Vajpayee Ji’s tenure). A One-time premium payment of Rs 2.66 Lakh would give a lifelong monthly pension of Rs 2, 000 and the assured return was 9% p.a.

Varishtha Pension Bima YojanaVPBY was re-launched during 2014-15 and Indian Citizens aged 60 years and above were eligible to invest in this pension scheme. Under this scheme, one-time premium payment of Rs 6,66,665/- gives a lifelong monthly pension of Rs 5000 (maximum).

The Govt has now launched a similar scheme which is called as ‘Pradhan Mantri Vaya Vandana Yojana’ (PMVVY) on 4th May 2017. Like VPBY, PMVVY is also a Pension scheme for Senior citizens who are above 60 years of age. The assured return on PMVVY would be 8%.

Read More: More Details of Pradhan Mantri Vaya Vandana Yojan – Apply Online

Features of the Scheme

Here are the features of the Pradhan Mantri Vaya Vandana Yojana –

Indian Citizens aged 60 years and above are eligible to invest in PMVVY.

The plan is open for subscription from 04-May-2017 to 03-May-2018.

One time premium payment of around Rs 1,44,578/- fetches a monthly pension of Rs 1,000 for 10 years.

One time premium payment of Rs 7,22,892/- would give a monthly pension of Rs 5000 (maximum).

Premium & Pension Details of the Scheme

PMVBY Premium Pension Calculation chart

Pradhan Mantri Vaya Vandana Yojana

  • The ceiling of maximum pension is for a family as a whole i.e. total amount of pension under all the PMVVY policies issued to a family under this plan shall not exceed the maximum pension limit. The family for this purpose will comprise of the pensioner, his/her spouse and dependents.
  • The policy term is for 10 years.
  • The policyholder can opt for monthly, quarterly, half yearly or yearly pension payment.
  • The assured return is 8% p.a. Effective annually yield works out to 8.30% for monthly pension.
  • In the event of unfortunate demise of the pensioner (policyholder), the premiums paid (purchase price) will be returned to the nominee/legal heir of the pensioner.
    The pension income is taxable in the hands of the pensioner. The tax rate depends on his/her income tax slab.
  • Life insurance Corporation (LIC) will be the exclusive administrator for PMVVY scheme.
  • Loan up to 75% of purchase price is available after completion of minimum 3 policy years. Interest on the loan will be recovered from your pension amount.
    PMVVY Pension Policy can be surrendered during the policy term under exceptional circumstances like pensioner requires money for treatment of any critical/terminal illness of self or spouse. The Surrender value payable will be 98% of purchase price.
  • Pension Payment will be through ECS or NEFT.
  • I believe that income tax benefits are not available on the Purchase price of PMVVY under Section 80C. Also, the pension amount is a taxable income in the hands of pensioners.
  • This scheme has been added to the ‘service tax’ exemption list.
  • LIC’s 8% Return Pension plan PMVVY & Benefits

Benefits of Pradhan Mantri Vaya Vandana Yojana –

Pension Payment

Pensioners will get the pension during the policy term, pension in arrears (at the end of each period as per mode is chosen by you) will be payable. For example: If you opt for monthly pension mode then after one month of policy date you will start receiving the pension amount.

Death Benefit under PMVVY

On the death of the pensioner during the policy term (10 years), the Purchase Price will be refunded to the nominee (or legal heirs in absence of nominee).
Maturity Benefits: On survival of pensioner to the end of the policy term, Purchase Price and final installment of the pension will be paid to the pensioner.

Maturity Benefits

On survival of pensioner to the end of the policy term, Purchase Price and final installment of the pension will be paid to the pensioner.

Important Links

Purchase PMVVY Plans

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11 comments

  • NEELAKANTAN

    GOOD INITIATIVE BY PM TO LAUNCH PENSION SCHEME FOCUSED FOR POOR AND MIDDLE CLASS PEOPLE. BUT THE LIMIT FOR PENSION SHOULD NOT BE AT THE FAMILY LEVEL BUT INDIVIDUAL LEVEL. IN MANY FAMILY PARENTS AND CHILDREN BOTH ARE RETIRED ( MEANS 4 MOUTHS TO FEED) AND EVERY PERSON NEEDS INDEPENDENCE. EVEN HUSBAND AND WIFE SHOULD HAVE INDEPENDENT LIMITS AS LONG AS THEY SURVIVE. THE LIMIT SHOULD BE ARRIVED AT KEEPING IN MIND HOW MUCH MONTHLY PENSION IS REQUIRED FOR DECENT SURVIVAL IN TODAYS TIME FOR A SINGLE PERSON.

    ALSO INTEREST SHOULD HAVE BEEN MORE AROUND 10% MONTHLY GUARANTEED PENSION.

  • Dr.L.Somasundaram

    If purchase price is eligible for 80 C deduction, it is good. Kindly clarify.

  • S Ragupathy

    Can I make an application for PMVVY 2017-18 ONLINE?

  • H.V. BHATKHANDE

    No point in investing as 80C benefits are not available. Even if you file nil ITX return you are an assesse and they will deduct tax. Not clear whether form 15H can be given.This is not a scheme for poor or middle class people. People also have misconceptions about Sukanya Yojana.

  • KRISHNAN

    Excellent initiative by this government headed by a dynamic PM. At a time when the monthly FD interest is maintaining falling trend, flat 8% pa interest for the next 10 years is truly commendable. It would indeed have been much better if the limit was kept at a higher level say at least Rs.15 L, considering that senior citizens would require some reasonable amount as monthly/Qtrly/Half yearly/annual pension to sustain a comfortable living.

  • Umesh Jaiswal

    Policy is useless unless Sum Assured is added. We can get better returns as well as Money safety in other schemes where Tax benefits not available. This policy also not allows any Tax Benefits.

  • shyamsunder h sarda

    i wish to approach this schema but unable to download form kindly from where i got form

  • Rohit

    Any online rebate if I purchase it online?

  • Dattaram

    Sir I having all ready varishta bima pension yojana & I got Rs. 60000/_ PA as interest, now can I invest in pradhan mantri yojana & take benefit of interest

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