PMVVY Calculator

The Pradhan Mantri Vaya Vandana Yojana (PMVVY) was a government-subsidized pension program operated exclusively through the Life Insurance Corporation of India (LIC) to provide financial security to senior citizens aged 60 and above. It provided a guaranteed pension payout for a 10-year policy tenure, backed by an assured return subsidized by the Ministry of Finance.

Important Regulatory Notice: PMVVY was officially closed to fresh subscriptions on 31 March 2023. However, existing policyholders who enrolled on or before 31 March 2023 continue to receive their contracted guaranteed pension through their full 10-year policy term. The FinToolkit PMVVY Calculator helps existing subscribers track their pension payouts, total receipts, and maturity principal return.

Core operational features of PMVVY

1. Guaranteed interest rate: For policies subscribed during the final FY 2022-23 tranche, the scheme guaranteed a fixed pension return of 7.40% per annum payable monthly (equivalent to 7.66% per annum payable yearly).
2. 10-year policy tenure: Pension is disbursed periodically throughout the 10-year period.
3. Principal return upon maturity: Upon completion of the 10-year tenure, the initial purchase price (principal deposit) is refunded in full to the surviving pensioner.
4. Death benefit: In the event of the pensioner's demise during the 10-year tenure, 100% of the purchase price is refunded to the nominated beneficiary.

Worked pension payout benchmark

Consider an existing policyholder who invested the maximum ceiling limit of ₹15,00,000 in PMVVY under the monthly pension option at 7.40% p.a.:

Over the 10-year policy period, the retiree receives ₹11,10,000 in guaranteed pension income (₹9,250 every month), and receives back the full ₹15,00,000 purchase price at Year 10.

Taxation rules on PMVVY

• Pension is taxable: Monthly or annual pension received is added to your income and taxed at your applicable income tax slab rate.
• Exempt purchase price: The return of the initial purchase price upon maturity (or death) is a return of capital and is completely tax-free.
• No Section 80C deduction: Investment in PMVVY did not qualify for Section 80C deductions.

Frequently asked questions

Can a senior citizen open a new PMVVY account today?

No. The scheme closed to fresh applicants on 31 March 2023. Senior citizens seeking government-guaranteed quarterly income can currently invest up to ₹30 Lakh in the Senior Citizens Savings Scheme (SCSS), which offers an attractive 8.20% sovereign return.

Can a loan be taken against a PMVVY policy?

Yes. Existing policyholders can avail a loan of up to 75% of the purchase price after completing 3 policy years. Loan interest is recovered from ongoing quarterly or monthly pension payouts.

Can PMVVY be prematurely surrendered?

Premature exit is permitted only under critical illness circumstances of the pensioner or spouse, upon which 98% of the purchase price is refunded.

Related retirement calculators

• Senior Citizens Savings Scheme (SCSS) Calculator — the primary active alternative offering 8.2% sovereign income.
• SWP Calculator — evaluate systematic mutual fund withdrawals for monthly retirement cash flow.
• Fixed Deposit Calculator — compare bank senior citizen term deposits.