Kisan Vikas Patra (KVP)

Post Office Savings Scheme India: Kisan Vikas Patra (KVP)

Overview -

Kisan Vikas Patra (KVP) doubles your money in 7 years and 3 months with the advantage of premature withdrawal. KVP is sold through all Head Post Offices and other authorized post offices throughout India. The rate of return is 9.75 per cent, compounded annually.

KVP accumulates money at a fixed rate, and your money doubles in 7 years and 3 months. But KVP is not meant for regular income. It is for those looking for a safe avenue of investment without the pressing need for a regular source of income.

Key Features:

• Minimum Investment Rs. 500/- No maximum limit.
• Rate of interest 8.40% compounded annually.
• Money doubles in 8 years and 7 months.
• Two adults, Individuals and minor through guardian can purchase.
• Companies, Trusts, Societies and any other Institution not eligible to purchase.
• Non-Resident Indian/HUF are not eligible to purchase.
• Facility of encashment from 2 ½ years.
• Maturity proceeds not drawn are eligible to Post office Savings account interest for a
  maximum period of two years.
• Facility of reinvestment on maturity.
• Patras can be pledged as security against a loan to Banks/Govt. Institutions.
• Patras are encashable at any Post office before maturity by way of transfer to desired
  Post office.
• Patras are transferable to any Post office in India.
• Patras are transferable from one person to another person before maturity
• Duplicate can be issued for lost, stolen, destroyed, mutilated and defaced patras.
• Nomination facility available.
• Facility of purchase/payment of Kisan vikas Patras to the holder of Power of attorney.
• Rebate under section 80 C not admissible.
• Interest income taxable but no TDS
• Deposits are exempt from Wealth tax.

Tax Benefits -

No income tax benefit is available under the scheme. However the deposits are exempt from Tax Deduction at Source (TDS) at the time of withdrawal.

Premature Encashment -

Premature encashment of the certificate is not permissible except at a discount in the case of death of the holder(s), forfeiture by a pledgee and when ordered by a court of law.

Returns -

KVP Scheme doubles money in seven years and three months.

What is the liquidity of KVP?
If the premature encashment takes place within a period of one year from the date of purchase of the certificate, only the face value of the certificate shall be payable. No interest is payable in this case.

After the expiry of one year, but before two years and six months from the date of the issue of the certificate, the face value of the certificate together with simple interest at the specified rate for the completed months for which the certificate has been held, shall be payable.

If a certificate is encashed any time after expiry of two-and-a-half years, the amount payable is as specified by the government from time to time.