The Pradhan Mantri Vaya Vandana Yojana (PMVVY) pension scheme was introduced by the government in 2017 with the goal of offering retirement benefits to older individuals. A guaranteed pension is available to seniors 60 years of age and older under the LIC-managed program.
The PMVVY plan pays out pension benefits in line with the pay-out option that the investor selected when the money were invested in the plan. Pension payments may be issued every month, every quarter, every half-year, or every year.
The policy may be acquired under the annual pension option for a price ranging from Rs. 1,56,658 for an Rs. 12,000 annual pension to Rs. 14,49,086 for an Rs. 1,11,000 annual pension.
Repayments of the pension will be paid if the subscriber lives over the ten-year insurance term (at the end of each period according to the mode selected). But, upon death, the candidate or the oldest son receives a return of the purchase price.
The following installments investment in the PMVVY pension plan, under which pensioners would receive a pension income, can be used to acquire the plan.
Pension payment method
The pension payment is handled through NEFT or the Aadhaar Enabled Payment System. Hence, the first pension payment will be sent after a month.
Depending on the form of pension payment, which can be monthly, quarterly, half-yearly, or yearly, the time period might be three months, six months, or a year from the day the scheme was purchased.
Does PMVV provide a tax credit under Section 80C?
Investing in the program will prevent the investor from claiming a deduction for investments up to Rs L5 lakh under section 80C since the scheme is not a section 80C-eligible investment.
Earnings from this plan will be taxed at the time of receipt in line with current tax laws and the appropriate tax rate.
While calculating the benefits that will be paid out under the plan, the amount of Tax (GST) paid won’t be considered.
Giving Up Worth The insurance allows for an instant withdrawal during the policy term in limited cases, such as when a retiree requires money for the treatment of a serious or fatal sickness of themselves or a spouse. The Submission Value due in such cases will be similar to 98% of the purchase price.
The PM Vaya Vandana Yojana provides a 7.4% annual interest rate with a monthly payment option. The LIC website states, ” “for the financial year
The Program will offer a guaranteed pension of 7.40% per year, payable monthly, in 2022–2023. During the duration of the policy’s term, this guaranteed rate of pension will be paid.
for all plans acquired up until March 3rd, 2023, of 10 years.” Loan
After three policy years have been completed, a financing facility becomes available. Remember that the maximum loan amount is only 75% of the purchase price. At periodic times, the rate of interest that will be charged on the loan amount will be decided.
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