The Narendra Modi government has floated yet another investment scheme for retired folks for meeting their regular income needs called as Pradhan Mantri Vaya Vandana Yojana or PMVVY. The scheme has been thrown open for subscription from May 4, 2017 to May7, 2018.

Details of the scheme:

Purchase Price: The amount invested towards the investment option is referred as purchase price.

Tenure: It comes with a tenure of 10 years and depending on the choice of its bearer, either, quarterly, half-yearly or annual pay-outs shall be made.

Fixed and assured pension depending on the amount of investment made.

Amount of Pension and Purchase Price Limits: The pension amount and the price as per the details of PMJJY cannot be over Rs. 60,000 and Rs. 7.5 lakh respectively for a family.

Returns : Depending on the pay-out mode, the returns offered under the plan are 8.0-8.3% irrespective of the age of the subscriber.

Tax implication: There shall be no service tax implication. However in the year of receiving the pension amount, the amount shall be taxable.

Conclusion:

When charting your portfolio for retirement needs, no one investment option provides a wholesome benefit and it has to be also diversified with a set of investment options. The other lucrative options being Post Office Senior Citizen Saving Scheme or SCSS or LIC pension plans. Still liquidity, tax-disadvantages, longer tenure all such factors need to be factored in before making the purchase.

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