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Pradhan Mantri Vaya Vandana Yojana, Features, Eligibility

Pradhan Mantri Vaya Vandana Yojana

The government introduced the Pradhan Mantri Vaya Vandana Yojana on May 4, 2017. This is a government pension programme designed to give senior persons social security and to shield them from a potential decline in interest income owing to bad market conditions. Senior adults 60 years of age or older may apply for this pension plan before March 31, 2020.

Pradhan Mantri Vaya Vandana Yojana Overview

The table below discusses some of the Pradhan Mantri Vaya Vandana Yojana’s highlights:

Pradhan Mantri Vaya Vandana Yojana

Particulars Details
Date of launching 4th May 2017
Department Department of Financial Services, Government of India
Government Ministry Ministry of Finance
Activation Period 4th May 2017 to 31st March 2020

Benefits of Pradhan Mantri Vaya Vandana Yojana

Life Insurance Corporation (LIC) manages and administers the government pension programme for senior citizens known as Pradhan Mantri Vaya Vandana Yojana (PMVVY). Following are some of the program’s key advantages:

  • The plan offers a monthly payment of 8% p.a. guaranteed return and is GST/service tax exempt.
  • After three policy years, the programme grants loans up to 75% of the purchase price.
  • The plan also permits early exit for the treatment of any serious or terminal sickness in oneself or one’s spouse. 98% of the Purchase Price will be returned in the event of such an early departure.
  • The nominee or beneficiary may use the benefits of the plan if the pensioner passes away within the 10-year policy period.
  • The pensioner, his or her spouse, and any dependents are all generally eligible for the program’s benefits.

Eligibility of Pradhan Mantri Vaya Vandana Yojana

Any person must meet the following requirements in order to be eligible for the Pradhan Mantri Vaya Vandana Yojana:

  • He or she must be 60 years of age or older to be eligible for the programme.
  • The duration of the policy should be ten years.
  • The maximum investment per senior citizen should be Rs. 15 lakh.
  • The monthly pension should not be less than Rs. 1,000 and never more than Rs. 10,000.

Role of Government in Pradhan Mantri Vaya Vandana Yojana

  • The amount of the Government’s financial liability is capped at the difference between the LIC’s market return and the guaranteed rate of return (7.4% for 2020–2021).
  • On the guaranteed rate of return, the pension is calculated.
  • This shields seniors (60 years of age and older) from a potential decline in interest income due to unsure market circumstances.

Key Points of Pradhan Mantri Vaya Vandana Yojana

  • The amount of the Government’s financial liability is capped at the difference between the LIC’s market return and the guaranteed rate of return (7.4% for 2020–2021).
  • On the guaranteed rate of return, the pension is calculated.
  • This shields seniors (60 years of age and older) from a potential decline in interest income due to unsure market circumstances.

Important Government Schemes

Important Government Schemes
Janani Suraksha yojana Pradhan Mantri Shram Yogi Maan Dhan
Mahatma Gandhi Bunkar Bima Yojana Midday Meal Scheme
Mahatma Gandhi National Rural Employment Guarantee Deen Dayal Upadhyay Antyodaya Yojana
National Social Assistance Programme (NSAP)
Atal Pension Yojana
Pradhan Mantri Jeevan Jyoti Bima Yojana Pradhan Mantri Suraksha Bima Yojana
Pradhan Mantri Matru Vandana Yojana
Pradhan Mantri Kisan Mandhan Yojana
Pradhan Mantri Laghu Vyapari Mandhan Yojana
Direct Benefit Transfer

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Pradhan Mantri Vaya Vandana Yojana FAQs

What is Pradhan Mantri Vaya Vandana Yojana for UPSC?

It is a pension scheme that ensures monthly pension payouts to senior citizens for the period of its term of 10 years.

What is Pradhan Mantri Vaya Vandana Yojana?

The Pradhan Mantri Vaya Vandana Yojana was launched by the Government on 4th May 2017. This is a government pension scheme with an aim to provide social security to senior citizens

What is Pradhan Mantri Vaya Vandana Yojana and senior citizen saving scheme?

Senior citizens can also invest ₹15 lakhs in the Pradhan Mantri Vaya Vandana Yojana (PMVVY), but only until March 31, 2023, after which it will be phased out.

Who is eligible for Vaya Vandana Yojana?

Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a Pension Scheme exclusively for the senior citizens aged 60 years and above.

Is PM Vaya Vandana Yojana tax free?

The deposits made in the scheme are exempt from income tax under section 80C of Income Tax Act, 1961.

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