Pradhan Mantri Vaya Vandana Yojana: Senior citizen can get Rs 1.11 lakh per year pension, check details of the scheme

New Delhi: The Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a social security scheme for senior citizens intended to give an assured minimum pension to them based on an assured return on the purchase price / subscription amount.

In June 2020, the Cabinet announced extension of Pradhan Mantri Vaya Vandana Yojana up to 31st March, 2023 for further period of three years beyond 31st March, 2020.

Pradhan Mantri Vaya Vandana Yojana pension benefits

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 upper limit of investment under this Scheme is Rs 15 lakh, offering monthly pension of Rs 10,000. 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. The minimum investment has also been revised to Rs 1,56,658 for pension of Rs 12,000 per annum and Rs 1,62,162 for getting a minimum pension amount of Rs.1000 per month under the scheme.

Pradhan Mantri Vaya Vandana Yojana minimum and maximum 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 Price. The minimum and maximum Purchase Price under different modes of pension will be as under:

Mode Minimum Maximum of Pension	Minimum Purchase Price	Maximum Purchase Price
Yearly	Rs 1,56,658	Rs 14,49,086
Half-yearly	Rs  1,59,574	Rs 14,76,064
Quarterly	Rs 1,61,074	Rs 14,89,933
Monthly	Rs 1,62,162	Rs 15,00,000

 

Pradhan Mantri Vaya Vandana Yojana Eligibility Conditions, maximum and minimum pension amount

a) Minimum Entry Age : 60 years (completed)

b) Maximum Entry Age : No limit

c) Policy Term : 10 years

d) Minimum Pension : Rs 1,000 per month
 Rs 3,000 per quarter
 Rs 6,000 per half-year
 Rs 12,000 per year

 e) Maximum Pension : Rs 9,250 per month
 Rs 27,750 per quarter
 Rs 55,500 per half-year
 Rs 1,11,000 per year

Tax on Pradhan Mantri Vaya Vandana Yojana

The scheme is exempted from Goods and Services Tax (GST). 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.