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Pradhan Mantri Vaya Vandana Yojana: Invest before March 31 to avail higher pension

New Delhi: If you are a senior citizen and looking for regular income at higher rates on your retirement savings, then you have time till March 31, 2020, to avail the benefit of the Pradhan Mantri Vaya Vandana Yojana (PMVVY) pension scheme, which offers up to 8.5% return. The government has not extended the last date to invest in the PMVVY scheme.

The PMVVY scheme offers assured pension to senior citizens (above 60) for 10 years. If the pensioner survives till the end of the policy term, the principal investment is returned to him. If he dies during the term, the amount is given to his nominee.

Experts say this is the best pension scheme for senior citizens after Senior Citizen’s Savings Scheme, offered by the department of post that offers higher returns of 8.6%. So if you have exhausted the Rs 15 lakh limit in SCSS, you may consider investing in this scheme.

PMVVY scheme can be bought from state-owned life insurance behemoth LIC in both offline and online mode.

If you invest Rs 10 lakh in the scheme, you can get a pension of Rs 6,666 per month for 10 years. If you opt for the quarterly pension payment mode, then you will get Rs 20,125 pension every quarter. In half-yearly and annual options, you will get Rs 40,650 and Rs 83,000 pension respectively.

Other than offering higher assured returns, the PMVVY offers ample liquidity to the policyholder. You can avail loan facility after completing three policy years. The maximum loan that can be granted will be 75% of the annuity purchase price. The rate of interest to be charged for the loan amount is determined at periodic intervals.

In case an investor wants to exit the scheme before the end of the policy term, he can do so only in special situations. The scheme allows premature exits if the pensioner requires money for the treatment of a critical/terminal illness of self or spouse. In such a case, the surrender value is 98% of the annuity purchase price.


Investment in PMVVY does not qualify for tax deduction under Section 80C. Pension received from the scheme is also taxable. However, GST will not be applicable on the annuity investment amount.

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