What is Pradhan Mantri Vaya Vandana Yojana (PMVVY)?
Meaning of Pradhan Mantri Vaya Vandana Yojana: Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a pension scheme launched by the Government of India for senior citizens (above 60 years of age). Under this scheme, the members get pension in the form of 8% assured return for 10 years. Senior citizens draw pension on monthly, quarterly, half yearly or yearly basis. Not only this, if the return is less than 8%, the government compensates it.
When and who started the Pradhan Mantri Vaya Vandana Yojana?
Finance Minister Arun Jaitley launched the Pradhan Mantri Vaya Vandana Yojana on 04 May 2017. The deadline to invest under this scheme was from May 04, 2017 to May 3, 2018. Latest information about Pradhan Mantri Vaya Vandana Yojana: Keeping in mind the well being of senior citizens, in the meeting of the Union Cabinet chaired by Prime Minister Narendra Modi, some important reforms were made in "Pradhan Mantri Vaya Vandana Yojana" which are as follows. :-
- Now the investment limit under PMVVY has been increased to 7.5 lakhs to 15 lakhs. With the increase in the investment limit, senior citizens will be able to get a pension of up to 10 thousand rupees per month.
- The last date to become a member of Pradhan Mantri Vaya Vandana Yojana has also been extended by two years to 31 March 2020. Earlier the investment deadline was from 04 May 2017 to 03 May 2018.
Objective of Prime Minister's Vaya Vandana Yojana?
Pradhan Mantri Vaya Vandana Yojana (PMVVY) is run by Life Insurance Corporation of India (LIC). Its objective is to provide social security to people above 60 years of age. According to the data of the Central Government, a total of 2.23 lakh senior citizens have taken this scheme till March 2018.
Mode of Pension Payment?
Pension will be paid monthly, quarterly, half-yearly and annually to the pensioner. Pension will be paid by NEFT or through Aadhaar enabled payment system.
How to apply for Pradhan Mantri Vaya Vandana Yojana?
You can apply for Pradhan Mantri Vaya Vandana Yojana from two parks:-
Offline application form in Pradhan Mantri Vaya Vandana Yojana: You can apply offline by filling the application form through Life Insurance Corporation of India (LIC) and submitting it in the office itself.
Online Application Form in Pradhan Mantri Vaya Vandana Yojana: To apply online under Pradhan Mantri Vaya Vandana Yojana, you can visit the website www.licindia.in and apply by filling the information and details given in the application form. It is mandatory to have PAN card and ID card for applying under Pradhan Mantri Vaya Vandana Yojana. You can get more information about this plan on the website of Life Insurance Corporation of India (LIC).
Mode of pension payment: Pension will be paid monthly, quarterly, half-yearly and annually to the pensioner. Pension will be paid by NEFT or through Aadhaar enabled payment system.
Benefits of Pradhan Mantri Vaya Vandana Yojana?
Following are the benefits available under Pradhan Mantri Vaya Vandana Yojana:-
- Under this pension scheme, the members get an assured return of 8%.
- This plan is for 10 years only.
- Once the pension plan is taken, you will be given pension on monthly basis for the next 10 years.
- There is an option to take pension on monthly, quarterly, half yearly or yearly basis.
- This scheme is exempted from Goods and Services Tax (GST).
- Loan up to 75% of the purchase price can be taken to meet the liquidity requirements after 3 years of taking the pension.
- In case of death of the pensioner during the policy term, the purchase price will be handed over to the beneficiaries. During this, the cost will be paid by the government to LIC in the form of subsidy.
- The plan also allows premature withdrawal for treatment of any critical/terminal illness of self or spouse.
- In case of premature withdrawal under this scheme, 98 percent of the plan purchase price will be refunded.
Maturity Benefit: The purchase price of pension and the last installment will be paid to the pensioner for the survival of the pensioner till the end of the policy term. Payment of Pension: Pensioners will get pension during the policy term. For example, if you opt for monthly pension mode after the policy date of one month then you will start getting pension from the next month itself.
Death Benefit under the plan: In case of death of the pensioner during the policy term (10 years), the purchase price will be returned to the nominee.
Free Look Period: If a policyholder is not satisfied with the "Terms and Conditions" of the policy, he/she can return the policy to the Corporation within 15 days from the date of receipt of the policy with reason for objection. (30 days if this policy is purchased online) If he does so, the entire amount will be refunded to him, minus the stamp duty and any pension installments paid. Exclusion: Suicide: If a policyholder commits suicide, his/her nominee will be paid the full purchase price.
Tax Benefits: The amount deposited under this scheme under section 80C of Income Tax 1961 is tax free. However, you will have to pay income tax on the interest earned from the deposited amount.
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