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Pradhan Mantri Vaya Vandana Yojana
Why is it in news?
- Cabinet approves Doubling of Investment Limit for Senior Citizens from Rs. 7.5 lakh to Rs.15 lakh under Pradhan MantriVayaVandanYojana (PMVVY)
Details
- The Union Cabinet has given its approval for extending the investment limit from Rs 7.5 lakhs to Rs 15 lakhs as well as extension of time limits for subscription from 4thMay 2018 to 31stMarch, 2020 under the Pradhan MantriVayaVandanYojana (PMVVY) as part of Government's commitment for financial inclusion and social security.
- Further, as a boost to the Social Security initiatives for senior citizens, the investment limit of Rs 7.5 lakh per family in the existing scheme is enhanced to Rs 15 lakh per senior citizen in the modified PMVVY, thereby providing a larger social security cover to the Senior citizens. It will enable upto Rs.10000 Pension per month for Senior Citizens.
- As of March, 2018, a total number of 2.23 lakh senior citizens are being benefited under PMVVY. In the previous scheme of Varishtha Pension Bima Yojana-2014, a total number of 3.11 lakh senior citizens are being benefited.
About PM VVY
- Government has launched the ‘Pradhan Mantri Vaya Vandana Yojana (PMVVY)’ to provide social security during old age and to protect elderly persons aged 60 and above against a future fall in their interest income due to uncertain market conditions. The scheme enables old age income security for senior citizens through provision of assured pension/return linked to the subscription amount based on government guarantee to Life Insurance Corporation of India (LIC).
- The PMVVY is being implemented through Life Insurance Corporation of India (LIC) to provide social security during old age and protect elderly persons aged 60 years and above against a future fall in their interest income due to uncertain market conditions.
- The scheme provides an assured pension based on a guaranteed rate of return of 8% per annum for ten years, with an option to opt for pension on a monthly / quarterly / half yearly and annual basis.
- The differential return, i.e. the difference between the return generated by LIC and the assured return of 8% per annum would be borne by Government of India as subsidy on an annual basis.
- The scheme is exempted from Goods and Services Tax (GST).
About Senior Citizen Saving Scheme
- Senior Citizens Savings Scheme, 2014 is a deposit scheme for individuals who have attained the age of 60 years.
- However, persons retiring on superannuation or under any Voluntary Retirement Scheme (VRS) who have attained the age of 55 years and retiring defense personnel who have attained the age of 50 years can also open the account subject to certain conditions.
- The upper limit of investment under this Scheme is rupees fifteen lakh.
- The rate of interest under the scheme is 8.3%.
- The deposits made in the scheme are exempt from income tax under section 80C of Income Tax Act, 1961.
- However, the interest earned on the deposit is not exempt from income tax. Provisions of Tax Deduction at Source (TDS) are applicable to the Scheme.
Source
PIB