Kisan Vikas Patra

kisan vikas patra

Kisan Vikas Patra (KVP) is a savings scheme offered by the Government of India that provides a safe and secure way for individuals to invest their money and earn guaranteed returns. The scheme is administered by the Department of Posts and is available at post offices across the country.

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Under the KVP scheme, individuals can invest a minimum amount of Rs. 1,000 and in multiples of Rs. 1,000 thereafter, with no maximum limit on the investment amount. The investment matures after a fixed period of time, which is currently set at 124 months (10 years and 4 months) from the date of investment. The scheme offers a fixed rate of interest, which is currently set at 6.9% per annum (compounded annually).

Introduction

Kisan Vikas Patra (KVP) is a government-backed savings scheme in India that offers a secure way for people to invest their money and earn guaranteed returns. It was first launched in 1988 but was stopped in 2011 due to concerns about money laundering. However, it was reintroduced in 2014 with more safeguards to prevent misuse.

To prevent money laundering, the government made it compulsory to provide proof of PAN Card for investments above Rs.50,000, and income proofs like salary slips or bank statements for deposits above Rs.10 lakh. Aadhaar number is also mandatory to identify the account holder.

KVP is a low-risk savings option where individuals can safely invest their money for a specific period. It can also be purchased jointly by two people, making it useful for families or groups who want to pool their savings. The scheme also allows for premature withdrawal under certain conditions.

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The KVP scheme is popular among Indians, especially those in rural areas without access to formal banking channels. It offers a secure way for people to save their money and earn guaranteed returns, making it an attractive long-term investment option.

Apart from being a safe and secure investment, the KVP scheme also offers tax benefits. The amount invested in the scheme can be claimed as a deduction under Section 80C of the Income Tax Act, up to a maximum limit of Rs. 1.5 lakhs per annum. However, the interest earned on the investment is taxable, though no tax is deducted at source on the interest earned.

Features and Benefits of Kisan Vikas Patra

Kisan Vikas Patra (KVP) is a popular savings scheme offered by the Government of India that provides a safe and secure investment option for individuals looking to build their savings over the long term.

Some of the Key Features and Benefits of KVP are:

Guaranteed Returns

KVP offers a fixed rate of interest, which is currently set at 6.9% per annum (compounded annually). This means that investors can earn a guaranteed return on their investment.

Safe and Secure Investment

The scheme is backed by the Government of India, which makes it a safe and secure investment option for individuals. The scheme also offers no credit risk, as it is backed by the government.

Flexible Investment Options

The investment amount in the scheme can be as low as Rs. 1,000 and in multiples of Rs. 1,000 thereafter, with no maximum limit on the investment amount. The scheme can also be purchased jointly by two individuals, making it a flexible investment option for families or groups.

Tax Benefits

The amount invested in the scheme can be claimed as a deduction under Section 80C of the Income Tax Act, up to a maximum limit of Rs. 1.5 lakhs per annum. This can help individuals reduce their tax liability.

No TDS Deduction

While the interest earned on the investment is taxable, no tax is deducted at source (TDS) on the interest earned. This can be beneficial for investors who may be in a lower tax bracket.

Eligibility Criteria for Investing in Kisan Vikas Patra

Kisan Vikas Patra (KVP) is a savings scheme offered by the Indian Post Office that is designed to help small investors grow their savings over a period of time. Here are the eligibility criteria for investing in Kisan Vikas Patra.

Citizenship

Only Indian citizens are eligible to invest in KVp.

Age

Anyone who is 18 years of age or above can invest in KVP.

Minimum Investment Amount

The minimum investment amount for KVP is Rs. 1,000. There is no maximum limit for investment.

Tenure

KVP has a lock-in period of 2.5 years. After this period, one can choose to withdraw the amount or reinvest it for another 2.5 years. The scheme has a maturity period of 10 years.

Mode of Investment

KVP can be purchased from any post office in India. One can also invest in KVP through authorized agents or brokers.

Nomination

Kisan Vikas Patra is a popular savings scheme in India, especially among those in rural areas who do not have access to formal banking channels. It provides a safe and secure way for people to invest their money and earn guaranteed returns, making it an attractive long-term investment option.

In addition to being a safe investment, KVP also offers tax benefits. People can claim a deduction on the amount invested in the scheme under Section 80C of the Income Tax Act, up to a maximum limit of Rs. 1.5 lakhs per annum. However, the interest earned on the investment is taxable, although no tax is deducted at the source on the interest earned.

Types of Certificates Available

A Kisan Vikas Patra certificate can be of the following types:

Single Holder Type Certificate

 This kind of certificate is issued to an adult for themselves or on behalf of a minor or to a minor.

Joint ‘A’ Type Certificate

 This type of certificate is issued jointly to two adults, payable to both the holders jointly or to the survivor.

Joint ‘B’ Type Certificate

This type of certificate is issued jointly to two adults, payable to either of the holders or to the survivor.

Can I get my KVP transferred from the post office to the bank?

Yes, your certificate can be transferred from the post office/bank to any other post office/bank by submitting an application via Form B either at your post office or bank. The application must be signed by the holder or holders, except for Joint ‘A’ type certificates where one of the joint account holders can sign the application if the other is dead.

What happens if KVP is not encashed after maturity?

In case the KVP certificate is not encashed after it reaches maturity, then you will be entitled to the post office savings interest, at the rate applicable on the entire payable maturity amount, at the given time. If the certificate is encashed within a month after maturity of the scheme, no interest shall be paid.

Is KVP taxable?

KVP doesn’t come under the 80C deductions, thus the returns are completely taxable. However, withdrawals made after the maturity of the scheme are exempt from Tax Deducted at Source (TDS).

What is Kisan Vikas Patra (KVP)?

Kisan Vikas Patra is a savings scheme offered by the Indian Post Office that is designed to help small investors grow their savings over a period of time.

Can KVP be transferred from one person to another?

Yes, KVP can be transferred from one person to another. However, the transfer can only be done once during the tenure of the scheme.

What is the tenure of KVP?

KVP has a lock-in period of 2.5 years. After this period, one can choose to withdraw the amount or reinvest it for another 2.5 years. The scheme has a maturity period of 10 years.

Apna Samaaj

Our mission at Apna Samaaj is to connect underprivileged communities in India with the resources and opportunities they need to thrive. We aim to create a comprehensive platform that provides access to welfare schemes from government bodies and NGOs, as well as private organizations, helping to bridge the gap between those in need and those who can provide support. Through our efforts, we strive to empower individuals and communities, drive economic growth, and make a positive impact on society.