::Pradhan Mantri Vaya Vandana Yojana::
- Government has launched the ‘Pradhan Mantri Vaya Vandana Yojana (PMVVY)’
to provide social security during old age and to protect elderly persons
aged 60 and above against a future fall in their interest income due to
uncertain market conditions. The scheme enables old age income security for
senior citizens through provision of assured pension/return linked to the
subscription amount based on government guarantee to Life Insurance
Corporation of India (LIC).
- The scheme provides an assured return of 8% per annum for 10 years. The
differential return, i.e. the difference between return generated by LIC and
the assured return of 8% per annum would be borne by Government of India as
subsidy on an annual basis. Pension is payable at the end of each period
during the policy tenure of 10 years as per the frequency of
monthly/quarterly/ half-yearly/yearly as chosen by the subscriber at the
time of purchase. Minimum purchase price under the scheme is Rs.1,50,000/-
for a minimum pension of Rs. 1,000/- per month and the maximum purchase
price is Rs.7,50,000/- for a maximum pension of Rs.5,000/- per month. The
scheme is exempted from Goods and Services Tax (GST). The scheme is open for
subscription till 3rd May 2018.
- Senior Citizens Savings Scheme, 2014 is a deposit scheme for individuals
who have attained the age of 60 years. However, persons retiring on
superannuation or under any Voluntary Retirement Scheme (VRS) who have
attained the age of 55 years and retiring defense personnel who have
attained the age of 50 years can also open the account subject to certain
conditions. The upper limit of investment under this Scheme is rupees
fifteen lakh. The rate of interest under the scheme for the quarter
01.01.2018 to 31.03.2018 is 8.3%. The deposits made in the scheme are exempt
from income tax under section 80C of Income Tax Act, 1961. However, the
interest earned on the deposit is not exempt from income tax. Provisions of
Tax Deduction at Source (TDS) are applicable to the Scheme.
Some of the important aspects of this scheme are given below:
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 beneficiary.
Maturity Benefit: 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.
Eligibility Conditions and Other Restrictions:
- Minimum Entry Age: 60 years (completed)
- Maximum Entry Age: No limit
- Policy Term : 10 years
- Minimum Pension: Rs. 1,000/- per month
- Rs. 3,000/- per quarter
- Rs.6,000/- per half-year
- Rs.12,000/- per year
- Maximum Pension: Rs. 5,000/- per month
- Rs. 15,000/- per quarter
- Rs. 30,000/- per half-year
- Rs. 60,000/- per year
Ceiling of maximum pension is for a family as a whole i.e. total amount of
pension under all the policies allowed to a family under this plan shall not
exceed the maximum pension limit. The family for this purpose will comprise of
pensioner, his/her spouse and dependents.
Payment of Purchase Price:
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
The minimum and maximum Purchase Price under different modes of pension will
be as under:
Maximum Purchase Price
|Mode of Pension
||Minimum Purchase Price
The Purchase Price to be charged shall be rounded to nearest rupee.
Mode of pension payment:
The modes of pension payment are monthly, quarterly, half-yearly & yearly.
The pension payment shall be through NEFT or Aadhaar Enabled Payment System.
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.
Sample Pension rates per Rs.1000/- Purchase Price
- The pension rates for Rs.1000/- Purchase Price for different modes of
pension payments are as below:
- Yearly: Rs. 83.00 p.a.
- Half-yearly: Rs. 81.30 p.a.
- Quarterly: Rs. 80.50 p.a.
- Monthly: Rs. 80.00 p.a.
- The pension instalment shall be rounded off to the nearest rupee.
- These rates are age independent.
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.
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. For the loan sanctioned in Financial Year 2016-17, the
applicable interest rate is 10% p.a. payable half-yearly for the entire term of
Loan interest will be recovered from pension amount payable under the policy.
The Loan interest will accrue as per the frequency of pension payment under the
policy and it will be due on the due date of pension. However, the loan
outstanding shall be recovered from the claim proceeds at the time of exit.
Statutory Taxes, if any, imposed on this Plan by the Government of India or
any other constitutional tax Authority of India shall be as per the Tax laws and
the rate of tax as applicable from time to time. The amount of tax paid shall
not be considered for the calculation of benefits payable under the plan.
Free Look 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.
Suicide: There shall be no exclusion on count of suicide and full Purchase
Price shall be payable.