Kisan Vikas Patra

Kisan Vikas Patra is a saving certificate scheme which was first launched in 1988 by India Post. It was successful in the early months but afterwards the Government of India set up a committee under supervision of Shyamala Gopinath which gave its recommendation to the Government that KVP could be misused. Hence the Government of India decided to close this scheme and KVP was closed in 2011 and the new government re-launched it in 2014.

Kisan Vikas Patra can be purchased by :

  • An adult in his own name, or on behalf of a minor
  • A Trust
  • Two adults jointly

Eligibility Criteria

You must fulfill a few basic requirements before investing in this scheme. They are:

  • You must be a resident of India.
  • You must be over 18 years of age. In case you’re a minor, you can still open an account but it has to be maintained by your parent/guardian.
  • You should not be a member of Hindu Undivided Families (HUFs). Non-Resident Indians (NRIs) are also not allowed to invest.[1]

Investment limitations

KVP certificates are available in the denominations of Rs 1000, Rs 5000, Rs 10000 and Rs 50000. The minimum amount that can be invested is Rs 1000. However, there is no upper limit on the purchase of KVPs.

Tax benefits

Kisan Vikas Patra does not offer any income tax benefits to the investor. No deduction u/s 80C is allowed on investment and the interest received upon maturity/withdrawal is fully taxable. However, withdrawals are exempted from Tax Deduction at Source (TDS) upon maturity.

Interest income

The amount (Principal) invested in Kisan Vikas Patra would get doubled in 124 months as per existing rate of interest. The rate of interest was slashed to 6.9% with effect from 1 April 2020.[2] to 31st March 2021

Withdrawal

The amount of KVP can be withdrawn after 124 months (10 years and 04 months). The maturity period of a KVP is 2 years 6 months (30 months). Premature encashment of the KVP certificate is not permissible. The certificates can only be encashed in event of the death of the holder or forfeiture by a pledge or on the order of the courts.

References
  1. "Everything You Need To Know About The Kisan Vikas Patra (KVP)". GovtSevaa. Retrieved 28 December 2020.
  2. Singh, Sandeep. "From April 1, Kisan Vikas Patra Interest Rate Cut To 6.9%, Maturity Period Extended". NDTV. Retrieved 25 November 2020.
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