This page provides all the details you need to know about the Prime Minister Vaya Vandhana Scheme (PM VVS).
Table of Contents
- What is PMVVS?
- History of PMVVS
- How does PMVVS work?
- Income Tax Benefits
- Who can open the account?
- How do I open the account?
- Last Date for Deposit
- Pension Frequency
- How much can I deposit?
- How much pension can I get?
- Is the Pension guaranteed?
- Interest Rates (%)
- Maturity Benefit
- Pre-mature Closure
- What if you die during the term?
- Loan Facility
- Free look period
What is PMVVS?
PMVVS stands for Prime Minister Vaya Vandhana Scheme.
It is a guaranteed pension scheme exclusively for senior citizens.
This scheme provides immediate pension. It means that if you deposit the money today, you will receive pension from next month onwards.
History of PMVVS
This scheme was launched on 04-May-2017 with the aim of providing long term, guaranteed and immediate pension to senior citizens.
When the scheme was launched in May-2017, senior citizens were offered a time period of 1 year (till May-2018) to deposit in this scheme.
But, in Budget 2018, it was announced that senior citizens can deposit in this scheme till 31-March-2020.
In May-2020, the Government has announced that senior citizens can deposit in this scheme till 31-March-2023.
So, you can deposit in this scheme anytime between 04-May-2017 and 31-March-2023.
This scheme is operated by LIC of India.
How does PMVVS work?
Deposit a lump sum amount and open an account
Choose your desired pension frequency (monthly, quarterly, half-yearly or yearly)
You will receive pension on a regular basis for 10 years as per your chosen pension frequency
At the end of 10 years, you will get your deposit amount back if you are alive
If you die during the term of 10 years, then the pension will be stopped immediately. Your deposit amount will be given to your nominees or legal heirs
Scheme offered by the Government of India
Scheme exclusively for senior citizens
Safe investment option
Various pension frequencies to choose as per your choice
Peace of mind during retirement life
No GST is charged
Income Tax Benefits
Income tax benefits will be same on both old and new tax systems.
No Income tax benefits.
The deposit amount is not eligible for deduction under Section 80C of Income Tax Act.
The pension amount you receive in this scheme is taxable. You need to declare the pension amount under "Income from other sources" during tax returns and it will be taxed as per your income tax slabs.
There is no tax on the deposit amount when it is paid back to you at the end of the term or when it is paid to your nominees or legal heirs in case of your death.
TDS (Tax Deducted at Source) is not deducted in this scheme.
Who can open the account?
This scheme is exclusively for senior citizens. So, you should be at least 60 years of age to deposit in this scheme.
There is no upper limit on the age to enter in this scheme.
How do I open the account?
This scheme is operated by LIC (Life Insurance Corporation) of India.
You can deposit in this scheme
through online at www.licindia.in or
through offline at LIC offices or through LIC agents
Last Date for Deposit
This scheme is a limited time offer scheme.
The last date to deposit in this scheme will be 31-March-2023.
Earlier, the last date to deposit in this scheme was 31-March-2020. But, in May-2020, the Government has extended the scheme for 3 more years and hence the last date to deposit in this scheme will be 31-March-2023.
So, you can deposit in this scheme anytime between 04-May-2017 and 31-March-2023.
This scheme is for the period of 10 years.
In this scheme, you can choose to receive pension in one of the following modes.
The pension amount will be paid to you at the end of the chosen pension frequency. The following table describes when you will receive pension.
When will you get Pension?
At the end of every month
At the end of every 3 months
At the end of every 6 months
At the end of every year
How much can I deposit?
The deposit amount varies based on your chosen pension frequency.
The following table lists the minimum and maximum deposit amount for various pension frequencies.
|Pension Frequency||Minimum Deposit Amount (Rs.)||Maximum Deposit Amount (Rs.)|
Please note that the maximum deposit amount is per senior citizen.
It means that you can have one or more accounts under this scheme. The total deposit amount of all the accounts should not exceed the maximum deposit amount for the chosen pension frequency.
For example, let us assume that you have 3 accounts under this scheme and you have chosen to receive quarterly pension. In this case, the total deposit amount of all the 3 accounts should not be more than Rs. 14,89,933.
In addition, if your spouse is also a senior citizen, then he or she can also invest a maximum of Rs. 15 Lakhs. So, you and your spouse can together invest a maximum of Rs. 30 Lakhs.
How much pension can I get?
The pension amount varies based on the deposit amount and the chosen pension frequency.
The following table lists minimum and maximum pension amount for various pension frequencies.
|Pension Frequency||Minimum Pension (Rs.)||Maximum Pension (Rs.)|
Is the Pension guaranteed?
Yes. The pension amount is guaranteed for the entire term of 10 years.
Interest Rates (%)
The interest rates offered in this scheme for various pension frequencies are given below.
|Pension Frequency||Annual Interest Rate (%)|
The interest rate (on the day of account opening) will remain the same throughout the tenure of 10 years. It will not change even if there are changes to the interest rate thereafter.
From May-2017 to 31-March-2020, the interest rate was 8% for the monthly pension frequency. But, in May-2020, the Government has announced some important changes to the interest rate of this scheme.
As per the announcement,
the interest rate will be revised every financial year
the interest rate for the financial year 2020-21 will be 7.4% for the monthly pension
the revised interest rate will be in line with the interest rate of Senior Citizens Savings Scheme (SCSS) upto a limit of 7.75%
If you survive till the end of 10 years, then the deposit amount will be given back to you.
You won't get bonus in this scheme.
Extension feature is not allowed in this scheme. It means that you can't extend this scheme after the term of 10 years.
You will need to close the account and get the deposit amount back.
If you want to deposit further, then you will need to open a new account with the new rules applicable at that point in time.
Pre-mature closure option is allowed in this scheme.
You can leave this scheme in the middle of 10 years only in case of exceptional situations like you are in need of money for the treatment of critical diseases of yourself or your spouse.
But, there is a penalty for leaving the scheme before completing the term. The penalty amount is 2% of the deposit amount.
If you leave pre-maturely, then 2% of the deposit amount will be deducted and you will get only 98% of the deposit amount back.
For example, if you deposit Rs. 10 Lakhs and you decide the leave the scheme after 3 years, then Rs. 20,000 will be deducted as penalty and you will get only Rs. 9.8 Lakhs back.
What if you die during the term?
If you die during the term of 10 years, then the pension will be stopped immediately and the entire deposit amount will be given back to your nominees or legal heirs.
There is no exclusion in case of suicide of the depositor. So, even if you commit suicide, your entire deposit amount will still be given to your nominees or legal heirs.
GST (Goods and Services Tax) is not charged in this scheme.
Loan facility is available in this scheme after completion of 3 years.
The maximum loan amount that you can get is 75% of the deposit amount.
The interest rate (%) for the loan amount will be decided from time to time. For example, for the loans granted till 30-April-2018, the annual interest rate is 10% payable half-yearly.
The loan interest will be recovered from the pension amount. The outstanding loan amount will be recovered from the deposit amount at the time of leaving the scheme.
Free look period
After depositing in this scheme, if you are not happy with it, you can return the policy and get your entire deposit amount back. This is called free look period.
Free look period is 15 days from the date of receipt of the policy. If you deposited online, then the free look period is 30 days.
NRI (Non Resident Indians) can't invest in this scheme.
Nomination facility is available in this scheme.