Lok Sabha Question No. 3205 (UNSTARRED), answered on 2018-01-05
Subject: PMVVY
Ministry: FINANCE
Asked by: PRATHAP SIMHA, SHOBHA KARANDLAJE

## Government of India Ministry of Finance Department of Financial Services Lok Sabha

Unstarred Question No. 3205

Friday, January 05, 2018/Pausha 15, 1939 (Saka)

## PMVVY

## 3205. SHRI PRATHAP SIMHA: KUMARI SHOBHA KARANDLAJE:

Will the Minister of FINANCE be pleased to state:

- (a)  whether  the  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 and if so, the details thereof and the salient features of the scheme;
- (b) whether the scheme is exclusively for the senior citizens and if so, the details thereof;
- (c) whether the scheme is exempted from GST and if so, the details thereof;
- (d)  the  steps  being  taken  by  the  Government to ensure that the benefits of the scheme  reach to the needy elderly persons/ senior citizens; and
- (e) whether the scheme is at par with other schemes for senior citizens such as Senior Citizens Saving Scheme (SCSS) and if so, the details thereof?

## Answer

## Minister of State in the Ministry of Finance (Shri Shiv Pratap Shukla)

(a) to (d):  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 scheme provides an assured return of 8% per annum for 10  years. The differential return, i.e. the difference between 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. Pension is payable at the end of each period during the policy tenure of 10 years as per the frequency of monthly/quarterly/ half-yearly/yearly as chosen by the subscriber at the time of purchase. Minimum purchase price under the scheme is Rs.1,50,000/- for a minimum  pension  of  Rs.  1,000/-  per  month  and  the  maximum  purchase  price  is  Rs.7,50,000/-  for  a maximum  pension  of  Rs.5,000/-  per  month.  The  scheme  is  exempted  from  Goods  and  Services  Tax (GST).

The scheme is open for subscription till 3 rd May 2018.

(e):  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  for  the  quarter  01.01.2018  to 31.03.2018 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.