So let’s briefly compare PMVVY with SCSS (Senior Citizen Savings Scheme). Just like 22,000+ Subscribers who have already joined. The minimum investment has also been revised to Rs.1,56,658 for a 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. In PMVVY, you can choose from monthly, quarterly, half-yearly or even annual. The scheme is available via both offline and online mode. Cut-Off Timing for Mutual Funds in India (2020-21), Annual rate of return % for Pradhan Mantri Vaya Vandana Yojana (PMVVY) has been. As of now, servicing around 300+ satisfied clients. Considering the current trend, even though there are few negatives, but this product is worth to consider for senior citizens. What are those important 5 changes? 2) For example if someone wants to buy PMVVY policy of 5lacs, does she need to pay additional GST over this 5lacs? The maximum loan payable will be 75% of the purchase price. There is no change in that. Are Debt Funds SAFER with new “10% in Liquid Assets” rule? LIC Bhagya Lakshmi Plan-LIC Micro Insurance Policy, LIC SIIP (PLAN No 852) Unit Linked Insurance Plan, PMVVY Extended till 31 March 2023: 7.66% interest (Yearly Pension). how often do you wish to receive the pension monthly, quarterly, half-yearly or yearly. However, this product fails to meet that expectation. Earlier, it was not such a practice to revise the interest rate of PMVVY on yearly basis. No. # If the pensioner suicide during the policy period, then his nominee or legal heirs will receive the full purchase price. However, now the Government changed this rule. Do remember that if you invest today, then your return on investment is fixed. An important thing to note here is the amount of. I help people align their investments with their real financial goals. # Returns-The only eye-catching in this product is a 7.4% guaranteed pension. So this extension will be helpful for them. Surrender value payable will be 98% of the purchase price. PMVVY is for 10 years while SCSS is for 5 years. And if they use a well thought out combination of PMVVY and SCSS, then it can work well for them from pension interest income angle. Pl. However, the Government changed certain rules with respect to PMVVY. After that Government not extended the date. On the death of the pensioner during the policy term, the Purchase Price will be refunded to the nominee (or legal heirs in absence of nominee). No tax benefit is available for investments in PMVVY. This post will highlight the changes made to Pradhan Mantri Vaya Vandana Yojana (PMVVY) 2020-2023 this time and also provide you with all the information you need to know about Pradhan Mantri Vaya Vandana Yojana (PMVVY). Dear Vidya, Sorry, I forgot to edit. We will also update you about Income Tax rules and various avenues of Income Tax saving, Financial planning, wealth generation, about use of Technology and Gadgets in Life Insurance Business. So if both spouses are senior citizens, they can invest Rs 15 lac each in both schemes, i.e. This also highlights the fact that PMVVY provides pension (or better call it interest income) for only 10 years and not the full life. If the pensioner survives up to the end of the policy term, Purchase Price and final installment of the pension will be paid to the pensioner. Required fields are marked *. The reason for the extension is to provide support to senior citizens in this low-interest rate scenario. But who will take care of raising inflation in terms of health issues or the cost of living? Dear Susmita, Yes, you have to pay the GST. # You can surrender this policy during the policy period under certain exceptional circumstances like pensioner requires money for treatment of any critical/terminal illness of self or spouse. Returns from this scheme will be taxed as per existing tax laws. This website is about investing, personal finance & financial planning. Hence, it is available for the investors up to 31st March 2023. INA100005241), SEBI Registered Investment Advisor + Financial Planner (Fee Only) || India, Full Goal-based financial planning service, Subscription Service for Asset Allocation (Equity & Debt%) management, Subscribe for Mutual Fund Recommendations, Click to share on WhatsApp (Opens in new window), Click to share on Twitter (Opens in new window), Click to share on Facebook (Opens in new window), Click to share on LinkedIn (Opens in new window). Many senior citizens (above age 60) are dependent on interest income to meet their regular expenses. And the pension mode is to be chosen at the time of investment i.e. Dear Priyajit, It is Rs.15,00,000. My mother, a senior citizen, does not have more than 3L income annually, and does not submit IT return. Simple, straight forward, backed by Government and managed by LIC are the positives of this product. Few differences are obviously there. # Pension is payable at the end of each period, during the policy term of 10 years, as per the frequency of monthly/ quarterly/ half-yearly/ yearly as chosen by the pensioner at the time of purchase. Individual requirements may require changing strategy. Do remember that suppose if you pruchased during the FY 2020-21 then the current 7.4% interest is applicable for you for throughout the 10 years period. But the last extension expired on 31st March 2020. 3. After the latest extension, it is now available until March 2023. Your email address will not be published. So that is all you needed to know about Pradhan Mantri Vaya Vandana Yojana (PMVVY) 2023 and its benefits. A policyholder has an option to return the policy within 15 days of the purchase. Thanks a the update ?..whether the limit of investment has been extended from earlier 15 lakh or not? 1 )whether one has to pay GST on PMVVY premium amount? Dear Kamal, In current scenario, who is giving you 7.4% and 7.75% (even if we consider the pre-tax)? I have been told by LIC that it is not required. Moving on, let’s see some points about the PMVVY scheme: A summary of what we discussed about the pension amount and the required investments (purchase amounts): That’s about the main features and working of Pradhan Mantri Vaya Vandana Yojana (PMVVY). Now, they have extended the date up to 31st March 2023. If i invest in Pradhan Mantri Vaya Vandana Yojana (PMVVY) today (on 21st May 2020), rate of interest will be fixed for complete policy term of 10 years (which is 7.40% for Monthly Pension)? Gold ETF Vs. Sovereign Gold Bonds: Which is better investment to Buy this Diwali? You can visit LIC India’s website to make the purchase. Subsequent changes in the interest rate during those 10 years will not affect your pension or returns. The PMVVY scheme has been extended by the Government of India a few times before also. He registered as a SEBI RIA in the year 2018. For the sake of discussion, I am putting a few points for comparison between PMVVY and SCSS below: Both PMVVY and SCSS are very similar in intent. Hence, for those who are looking for safety, constant stream of income and best returns in current scenario, these are the best. But the government has said that the interest rate of PMVVY will move forward in line with the interest rate of SCSS. From now onwards, it will be changed on a yearly basis. # Liquidity-As one grows older, uncertainties related to health or other issues pop up. However, now for FY 2020-21, Government reduced the interest rate to 7.4%. Hence, one must invest in a highly liquid product. The rate of return for PMVVY has been reduced to 7.4% in 2020-21 and the scheme has been extended until 31st March 2023. Having said that, what is uncomforting is that a large amount gets locked-in in one go if you purchase this product. Currently, for the quarter ending September, 2020, the interest rate is 6.6 per cent per annum. WOULD LIKE TO INVEST UNDER PMVVY SCHEME FOR WHICH NEED SOMEONE FROM LIC TO CALL ME. As for those senior citizens who belong to higher tax bracket, they already have large enough income to be a part of the higher tax brackets. Dev Ashish is a SEBI-registered Investment Advisor (RIA Reg. Pradhan Mantri Vaya Vandana Yojana (PMVVY) 2020 – 2023 now came up with five major changes. First, the major changes made to the scheme are: As you can see, there have been a few changes. But this rate is applicable only for those buying PMVVY in current FY 2020-21. Conclusion:-Considering the current falling interest rates and scary debt funds, it is a product made for senior citizens. So if someone vies that after 10 years, the rates will be lower than what they are now, then PMVVY is a better choice than SCSS. # Pradhan Mantri Vaya Vandana Yojana (PMVVY) scheme does not provide tax deduction benefit under section 80C of the Income Tax Act. The PMVVY can be purchased in both offline and online modes. If her annual income exceeds 3L but remains under 5L, does she need to submit IT return? Often the scheme is compared with other senior-citizen specific schemes. However, if one compares with FDs, then this product may be eye-catching. If yes, does she need to continue submitting IT return? This year if she purchase PMVVY policy, does she need to submit IT return this year? NB: Every time I am submitting comment it disappears after page refresh, and I have to again post it. Currently, SCSS provides 7.4% while PMVVY provides 7.4% per annum. Just one query, r they charging GST on premium unlike erstwhile? For all your Financial Planning & Investment Advisory requirements, Talk To Us. This means that one can’t sustain by depending on this product itself. It is hard for an individual to survive with meager Rs.9,250 per month pension. The interest rates applicable for the new PMVVY scheme is 7.4%. Dear Balaji, Thanks for the suggestion.