Pradhan Mantri Vaya Vandana Yojana Pmvvy

UPSC Exam Preparation: Topic of the Day – Pradhan Mantri Vaya Vandana Yojana (PMVVY)

The Government of India announced the Pradhan Mantri Vaya Vandana Yojana (PMVVY) in May, 2017 in order to provide social security to the senior citizens and for the protection of the elderly against a fall in the interest income due to unfavourable market conditions in the future.

  • The amount of investment made in the scheme is called the ‘purchase price’.
  • Depending on the pension option (monthly, quarterly, yearly), the pension begins as an arrear, i.e., starts from the end of the chosen period. 
  • The scheme is based on the amount invested and extends to a period of 10 years.
  • The return in PMVVY range from 8 to 8.3 percent depending on the mode of pension that one chooses.
  • It carries a fixed and assured pension (return) as mentioned in the policy document till the maturity of the scheme. 
  • The amount of pension in PMVVY is not based on age.
  • There is no tax benefit available on the amount invested. Further, the pension received will be fully taxable in the hands of the individual in the year of receipt. The government, however, has exempted PMVVY from service tax.
  • The scheme offers a return higher than bank FD’s and comes with a sovereign guarantee. 


The limits:
Similar to post office monthly income scheme or the senior citizen savings scheme (SCSS), the maximum investment amount (purchase price) and the pension amount that one can get is capped. Currently, the total amount of pension or the purchase price under all the PMVVY policies allowed to a family cannot exceed Rs 60,000 per annum or Rs 7.5 lakh respectively. The family for this purpose will comprise of the pensioner, his or her spouse and dependents. 


Initially the scheme was meant to be made available only for one year from the date of launch. The finance minister has proposed to extend the Pradhanmantri Vaya Vandana Yojana (PMVVY) scheme till March, 2020. It has also proposed to increase the current investment limit t o Rs 15 lakh from the existing limit of Rs 7.5 lakh per senior citizen. 

Leave a Comment

Your email address will not be published. Required fields are marked *