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Government to launch GST exempt pension policy for
senior citizens
NEW DELHI:
Finance Minister Arun Jaitley will launch a pension
scheme for elderly with 8 per cent fixed rate of
interest on their savings on Friday. This pension scheme
will be exempt from both service tax and Goods and
Services Tax, reports suggest. It can be purchased
offline as well as online through Life Insurance
Corporation (LIC) of India which has been given the sole
privilege to operate this scheme, the finance ministry
said in a statement on Thursday.
Pradhan Mantri Vaya
Vandana Yojana (PMVVY) is a pension scheme announced by
the government exclusively for the senior citizens aged
60 years and above which is available from May 4, 2017
to May 3, 2018. "Scheme provides an assured return of 8
per cent per annum payable monthly (equivalent to 8.30
per annum effective) for 10 years," it said.
Pension is payable at the
end of each period, during the policy term of 10 years,
as per the frequency of monthly, quarterly, half-yearly,
yearly as chosen by the pensioner at the time of
purchase, it said. The scheme is exempted from Goods and
Services Tax, it said, adding, loan up to 75 per cent of
purchase price shall be allowed after 3 policy years to
meet the liquidity needs.
Loan interest will be
recovered from the pension instalments and loan to be
recovered from claim proceeds, it said, adding the
scheme also allows for premature exit for the treatment
of any critical or terminal illness of self or spouse.
On such premature exit, 98 per cent of the purchase
price will be refunded.
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