Hey,The largest life insurance company in India, the Life Insurance Corporation of India (LIC), operates and manages the PMVVY retirement and pension plan. It is a retirement and pension plan unveiled by the government of India. The programme was introduced in May 2017. The programme gives out regular pensions on a monthly, quarterly, half-yearly, or annual basis. The PMVVY is a great substitute for conventional bank deposits. However, do not be under any impression that the LIC Pradhan Mantri Vaya Vandana Yojana tax benefits its beneficiaries.With NoBroker's house loan services, you may get a stress-free home loan disbursement.Calculate your EMI on home loan with the help of the NoBroker EMI calculator.The purchase price of the scheme is the sum of money that the buyers invested. The system gives a secured rate of return on investment since the sovereign guarantees it.
The PMVVY is an investment plan rather than a tax-saving strategy. Depending on the investment, the elderly will receive a pension every month, quarter, half-year, or annually. The returns obtained through this programme are subject to tax at the appropriate rate. There is no income tax credit for the payment, and under this plan, policyholders cannot deduct their contributions under Section 80C of the Income Tax Act. PMVVY, however, is free from GST.Is interest on PMVVY taxable?The Pradhan Mantri Vaya Vandana Yojana (PMVVY) offers a 7.4% annual government return that is payable on a monthly basis. If you choose a monthly pension plan, the annual interest rate of 7.4 percent translates to 7.66 percent per annum. The scheme doesn't incur any GST or service fees because it effectively functions as a pension plan.The scheme, however, is not eligible for income tax relief. The earnings are taxed. The Government of India would be responsible for covering the difference between the interest that the LIC generates and the 7.4% guaranteed returns. The difference will be paid to LIC by the federal government as a subsidy.To reiterate the PMVVY tax benefit, I would say that this plan is only an investing plan; there is no tax exemption included. The maximum investment that people over 60 can make is Rs 1.5 lakh. You must submit an application for this by March 31, 2023. General insurance policies and term insurance policies are subject to an 18 percent GST.I would like to conclude here about the Pradhan Mantri Vaya Vandana Yojana tax benefits. I hope this helps:)Read More:Can I claim tax benefit for an under-construction property?How to Claim Joint Home Loan Tax Benefit: Eligibility and DocumentsWhat is the tax benefit on a second home loan?
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Is Interest on PMVVY Taxable?
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August 11, 2022
2022-08-11T19:29:59+00:00 2022-08-11T19:30:00+00:00Comment
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