Pradhan Mantri Vaya Vandana Yojana (LIC Plan 856) is a closed government pension scheme for people aged 60 and above. A lump sum of up to ₹15 lakh bought a fixed pension for 10 years at 7.4% a year (monthly mode), with the purchase price returned at the end. ₹10 lakh gives ₹6,167 a month; ₹15 lakh gives ₹9,250 a month. New investment stopped after 31 March 2023.
PMVVY Plan 856 Pension Calculator
Your estimate
- Pension rate for this mode (per year)
- 7.40%
- Total pension in 10 years
- ₹7,40,040
- Purchase price back at the end of year 10
- ₹10,00,000
- Death benefitpurchase price refunded to the nominee
- ₹10,00,000
- Maximum loan (after 3 years)
- ₹7,50,000
- Purchase price₹10,00,00057%
- Total pension in 10 years₹7,40,04043%
Year-wise pension and refund of purchase price
| Policy year | Pension that year | Total pension so far | Lump sum paid |
|---|---|---|---|
| 1 | ₹74,004 | ₹74,004 | ₹0 |
| 2 | ₹74,004 | ₹1,48,008 | ₹0 |
| 3 | ₹74,004 | ₹2,22,012 | ₹0 |
| 4 | ₹74,004 | ₹2,96,016 | ₹0 |
| 5 | ₹74,004 | ₹3,70,020 | ₹0 |
| 6 | ₹74,004 | ₹4,44,024 | ₹0 |
| 7 | ₹74,004 | ₹5,18,028 | ₹0 |
| 8 | ₹74,004 | ₹5,92,032 | ₹0 |
| 9 | ₹74,004 | ₹6,66,036 | ₹0 |
| 10 | ₹74,004 | ₹7,40,040 | ₹10,00,000 |
Individual life insurance premiums are exempt from GST from 22 September 2025. Figures are estimates based on typical rates and may differ from LIC’s official quote.
What is Pradhan Mantri Vaya Vandana Yojana (Plan 856)?
Pradhan Mantri Vaya Vandana Yojana (PMVVY) was a pension scheme for senior citizens, run by LIC for the Government of India. You invested one lump sum, the purchase price, and received a fixed pension for 10 years. At the end of the term the purchase price came back to you in full. The government subsidised the difference between the assured rate and LIC’s actual return.
PMVVY first launched in May 2017 at 8% a year. Plan 856 is the revised version sold from 2020, with a pension rate of 7.40% a year for monthly pension, and it closed to new investment after 31 March 2023. Policies bought before that date continue to pay until their 10-year term finishes, so many pensioners still receive PMVVY income today.
PMVVY Plan 856 at a glance
| Feature | Details |
|---|---|
| Plan number | 856 |
| Type | 10-year pension with return of purchase price |
| Entry age | 60 years completed, no upper limit |
| Investment | Single lump sum, up to ₹15 lakh per senior citizen |
| Pension rate | 7.40% a year (monthly); up to 7.66% (yearly) |
| Pension range | ₹1,000 to ₹9,250 a month |
| Policy term | 10 years |
| Maturity | Purchase price + final pension instalment |
| Death benefit | Purchase price refunded |
| Loan | Up to 75% of purchase price after 3 years |
| Status | Closed to new investment after 31 March 2023 |
Pension limits by mode
| Mode | Rate (per year) | Minimum pension | Maximum pension | Price for maximum pension |
|---|---|---|---|---|
| Monthly | 7.40% | ₹1,000 | ₹9,250 | ₹15,00,000 |
| Quarterly | 7.45% | ₹3,000 | ₹27,750 | ₹14,89,933 |
| Half-yearly | 7.52% | ₹6,000 | ₹55,500 | ₹14,76,064 |
| Yearly | 7.66% | ₹12,000 | ₹1,11,000 | ₹14,49,086 |
The minimum investment for ₹1,000 a month was ₹1,62,162.
How the PMVVY pension is calculated
Pension per instalment = purchase price × rate for your mode ÷ number of instalments a year. Age does not affect it.
Worked example. A 65-year-old invests ₹10,00,000 with monthly pension:
- Pension: ₹6,167 a month, or ₹74,004 a year
- Total pension over 10 years: ₹7,40,040
- At the end of year 10: ₹10,00,000 returned
- Loan available after 3 years: up to ₹7,50,000
The same ₹10 lakh on yearly mode gives ₹76,600 once a year. At the ₹15 lakh ceiling, monthly pension is ₹9,250.
Tip: if you and your spouse are both 60 or older, each could invest up to ₹15 lakh in your own name. Many couples used this to double the family pension to ₹18,500 a month.
Maturity and death benefit
- Maturity: on surviving the 10 years, you get the purchase price back along with the last pension instalment.
- Death during the term: the purchase price is paid to the nominee and the policy ends.
Either way, the capital is protected. The return is the pension itself.
Loan and early exit
- Loan: after three policy years, up to 75% of the purchase price. Interest is recovered from the pension.
- Early exit: only for critical or terminal illness of the pensioner or spouse, with 98% of the purchase price refunded.
Tax treatment
The pension is taxable as income. Unlike tax-saving instruments, the PMVVY investment did not earn a Section 123 of the Income-tax Act, 2025 (earlier Section 80C) deduction. The purchase price you get back at maturity or on death is your own money and is not taxed again.
What should PMVVY pensioners do when the term ends?
When your 10-year term ends, the purchase price lands in your bank account. Since PMVVY is closed, you will need a new home for that money. Common options are LIC’s lifetime annuity plans such as Jeevan Akshay VII, bank or post-office senior citizen deposits, or a mix. Our pension calculator helps compare annuity income. If you also hold the older Varishtha Pension Bima Yojana 828, note that it pays for life rather than 10 years.
How to use this calculator
- Enter the pensioner’s age.
- Enter the purchase price from your policy.
- Choose the pension mode.
- Read the pension per instalment, yearly pension and 10-year total.
- Check the table for the year-by-year pension and the refund in year 10.
These are estimates from an independent calculator. Your policy document shows the exact pension LIC pays.
Frequently asked questions
Can I still invest in PMVVY?
No. Pradhan Mantri Vaya Vandana Yojana closed to new investment after 31 March 2023. Existing policies continue to pay pension until their 10-year term ends, and the purchase price is then returned.
What is the PMVVY pension on ₹15 lakh?
The maximum investment of ₹15 lakh gives ₹9,250 a month, which is ₹1,11,000 a year, at the 7.4% monthly-mode rate. Over 10 years that adds up to ₹11,10,000 in pension, plus the ₹15 lakh returned at the end.
What was the PMVVY interest rate?
For Plan 856 the pension rate was 7.40% a year payable monthly. Taking pension quarterly, half-yearly or yearly gave slightly more: about 7.45%, 7.52% and 7.66% a year respectively.
What happens when the 10-year PMVVY term ends?
On survival to the end of the 10-year term, you receive the full purchase price along with the final pension instalment. The policy then ends.
What does the nominee get if the pensioner dies?
The purchase price is refunded to the nominee and the policy ends. Pension already paid is not deducted from this amount.
Can I take a loan or exit PMVVY early?
A loan of up to 75% of the purchase price is available after three policy years. Early exit is allowed only for critical or terminal illness of the pensioner or spouse, and 98% of the purchase price is then refunded.
Is PMVVY pension taxable?
Yes. The pension is taxable as income at your slab rate, and the purchase price did not qualify for a Section 123 (earlier 80C) deduction. The refund of the purchase price is a return of your own capital.
Disclaimer: LIC Premium Calculators is an independent website. We are not affiliated with, endorsed by or connected to Life Insurance Corporation of India. All figures are estimates for illustration; confirm exact premiums and benefits with LIC or a licensed agent before buying.