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Budget 2018 : PMVVY limit to increase to Rs 15 Lakh

The Pradhanmantri Vaya Vandana Yojana (PMVVY) scheme has been proposed to be extended till March 2020 as stated by the finance minister. In the scheme, the existing limit of Rs. 7.5 Lakh per senior citizen will also be increased to Rs. 15 Lakh per senior citizen. This pension scheme has been sponsored by the government of India and the amount of investment made in the scheme is referred to as the purchase price. The scheme was launched on 4th May 2017 and was initially meant to be available for a just a year from its launch date. The scheme is for 10 years and is based on the amount of money invested in it. It also carries an assured return as mentioned in the document till the scheme matures.

Presently, the amount of pension that has been allocated under the PMVVY policies cannot exceed Rs. 60,000 per annum. The family can comprise of the pensioner along with his/her spouse and dependents. In case some money is needed by the investor for the treatment of any critical illness of self or spouse then the exit will be allowed and in that case, 98% of the purchase price will be given back. PMVVY does not contain any tax benefit and the income too is not tax-free. However, it does offer a higher return than the bank FDs.

It is the best option for the retired population which looks for investment opportunities that are safe and also offer an assured return so that their regular income needs can be comfortably met. Since not one single investment can meet the requirements of an investor, it is therefore needed to keep an expanded retirement portfolio which can meet the concerns of the investor. PMVVY locks the funds for a long duration with the interest rates in the country being way down. It also offers a fixed income for the next ten years. The only disadvantage that this scheme can offer is the fact that if at all the interest rates goes down, the liquidity in the scheme becomes restrictive. Therefore, it is advised that a portion of only those funds should be invested which can be parked on a longer tenure.

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