Kisan Vikas Patra, also popularly known as KVP is one of a very good investment scheme with high interest rates. KVP has the following main features –
- Money doubles in 8 years and 7 months.
- Rate of interest 8.40% compounded annually.
- Minimum Investment Rs. 500/- No maximum limit.
- 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
- 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.
Facility for premature encashment as per the table given below (for the KVP purchased on or after 1st March 2003)
|Maturity value for Rs. 1,000/- denomination |
Tax Liability on KVP – Interest accrued on yearly basis will be considered as income for Income Tax purposes.