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PDF Editor FAQ

Does the husband get his wife’s pension after her death?

Applicable for Civilian Pensioners retired from central government departments : if Pensioner passes away, then spouse will be eligible for predetermined portion of Basic Pension called Family Pension as indicated in PPO (Pension Payment Order) plus existing dearness relief.

My mother in law was a primary school teacher, died in 2015 leaving husband and unmarried younger daughter apart from my wife (elder daughter). My father in law is getting the family pension. Will his unmarried daughter get pension after his death?

Pension Rules differ from service to service, and state to state. Refer to the rules as are applicable in your case.

What are some of the best pension plans that I can take for my parents in India?

I would like to provide details about different investment options in India available for retired people to get some income.Investment optionsRetired people get some money from their employer or through the investments they made or the corpus the have accumulated for the goal. Retirees should invest their corpus or money accumulated in a basket of secure investments that will yield attractive and tax free annuities. Apart from putting part of their fund in bank fixed deposits, they can spread their balance retirement corpus in the following investment options.Post Office Monthly Income Scheme (POMIS):In this scheme, you invest a certain amount and earn a fixed interest every month. POMIS is a 5 year investment option with a maximum cap of Rs 9 lakh under joint ownership and Rs 4.5 lakh under single ownership.The interest rate is set each quarter. It is currently at 7.8% per annum payable monthly. However, the interest is taxable. Those retirees whose total income is below the taxable limit can consider this investment option.Tax-free bonds:Tax-free bonds are issued primarily by government-owned institutions like Indian Railway Finance Corporation (IRFC), Power Finance Corporation (PFC), National Highways Authority of India (NHAI), Housing and Urban Development Corporation (HUDCO), Rural Electrification Corporation (REC) and NTPC. Retirees may take note of the following aspects of tax-free bonds before investing.They are long-term investments and mature after 10 to 15 years.One can invest in them if they okay with long lock-in period and do not need money.The interest is tax-free therefore, there is no Tax Deducted at Source (TDS).Pension plans of life insurance companies:There are different pension plans offered by life insurance companies, including pension for lifetime for self, after death pension to spouse and/or return of corpus to heirs.On most of the pension plans, the annuity yield currently is around 6% per annum. Though one should be very careful while choosing the annuity or pension plans.Senior Citizens’ Savings Scheme (SCSS):This is a government guaranteed savings scheme with a tenure of 5 years. It can be further extended for another 3 years on maturity. Senior citizens aged 60 years or early retirees under VRS can invest in this saving scheme.SCSS account can be opened in any of the authorized banks or post office branches. Present interest rate on SCSS is 8.7%. But the interest income is taxable. The upper investment limit is Rs 15 lakh. The interest rates on SCSS are revised each quarter.Pradhan Mantri Vaya Vanadana Yojana (PMVVY)This scheme is a pension scheme for senior citizens (60 & above) and it got introduced by Government of India on 4th May, 2017. The main objective of this scheme is to give senior citizens regular income source i.e. pension. This scheme available for purchase, both online and offline through Life Insurance Corporation of India (LIC), till Mar. 31, 2020.Term of policy is for 10 years and pension mode is monthly, quarterly, semi-annually and annually. PMVVY offers 7%-7.40% returns pa.The investment limit has been recently increased to 15 lakhs which were 7.5 lakh earlier. Also, this limit is applicable for per senior citizen. In other words, if husband and wife, both are senior citizen then they both can invest 15 lakhs each.Mutual Funds:Though equity mutual funds may give higher returns, there may be risks linked to stock market movements. Debt mutual funds have now been exposed to considerable risks due to defaults by corporate bond repayments and liquidity crunch in the NBFC industry.Feel free to connect in case of any further questions.Note: above answer is based on my article on my website.

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