PM Vaya Vandana Yojana

The PMVVY was a highly popular pension scheme exclusively for senior citizens (aged 60 and above), operated by LIC, which provided an assured return (pension) for 10 years. The Current Reality: If an agent is trying to sell you a "new PMVVY policy" in 2026, it is a mis-selling tactic. The Government of India officially closed this scheme for new subscriptions on March 31, 2023, and it has not been extended.

If you invested in PMVVY before the 2023 deadline, you have nothing to worry about.

Since PMVVY is closed, where should a senior citizen invest their retirement corpus for safe, guaranteed returns?

Pradhan Mantri Vaya Vandana Yojana (PMVVY) is a government-subsidized pension scheme designed exclusively for senior citizens aged 60 years and above, administered exclusively through the Life Insurance Corporation of India (LIC). It provides an assured return on purchase price, insulating elders against dropping bank fixed deposit rates.

Subscribers commit a lump sum purchase price for a 10-year policy tenure, receiving predictable monthly, quarterly, half-yearly, or annual pension remittances directly into their bank accounts.

To assist senior citizens during unexpected liquidity crunches without requiring policy cancellation, PMVVY permits policy loans after three complete policy years. Subscribers can borrow up to 75% of their invested purchase price.

Loan interest is recovered directly from periodic pension installments, while the outstanding loan principal is settled upon maturity or upon demise of the pensioner, ensuring complete financial peace of mind.

While PMVVY enforces a 10-year lock-in period to protect retirement corpus, premature surrender is permitted under compassionate circumstances. If the pensioner or their spouse requires funds for the treatment of critical illness or terminal medical conditions, LIC permits surrender of the policy.

Under compassionate surrender rules, LIC refunds 98% of the initial purchase price to the subscriber, providing essential liquidity for hospital expenses.

If the pensioner survives the full 10-year policy term, the entire original purchase price along with the final pension installment is refunded directly to their bank account. If the pensioner passes away during the policy term, the full purchase price is paid out promptly to the designated nominee or legal heir without administrative deductions.

Pension earnings under PMVVY do not qualify for special tax exemptions and are treated as taxable income under the head "Income from Other Sources". However, senior citizens aged 60 and above can claim deductions up to ₹50,000 on interest and pension earnings under Section 80TTB of the Income Tax Act.

To prevent automatic Tax Deducted at Source (TDS) by LIC, senior citizens whose total estimated annual income falls below the statutory taxable threshold should submit Form 15H at the beginning of each financial year to their servicing LIC branch.

To maintain uninterrupted pension credits, PMVVY subscribers must submit an annual existence certificate (Life Certificate) once every twelve months. Pensioners can submit this certificate physically at their servicing LIC branch or digitally through the Jeevan Pramaan biometric portal.

Using the official Jeevan Pramaan smartphone application or visiting a local Citizen Service Centre (CSC) equipped with an iris or fingerprint scanner, elderly citizens can generate a digital life certificate from home without waiting in bank queues.

Subscribers and their adult children can track pension annuity dispatches online through the official LIC customer portal (licindia.in). After registering the policy number, pensioners can view past NEFT transaction reference numbers, download annual pension tax deduction certificates, and initiate bank account change requests.