Post Office Small Savings Scheme – Kisan Vikas Patra (KVP )Interest Rate Calculator & Tax Benefits

Published Date - 15 March 2018 04:08:24 Updated Date - 15 March 2018 04:10:08

Kisan Vikas Patra (KVP) is one of money double scheme of government of india, available through most of post-offices of india. 

it is a saving certificate scheme that was launched in 1988 by India Post. It is a small saving scheme that focuses on doubling the money of investors in a period of 112 months or 9 years and 4 months.

The scheme was quite successful in the earlier years but was closed after the intervention of the Indian Government in 2011. The closure happened after the Government of India set up a committee to determine the efficiency of this scheme under the supervision of Shyamala Gopinath. The findings of the committee stated that the scheme could be used to accumulate black money through money laundering.

In 2014, under narendra modi's government this scheme was re-launched, with certain reforms that addressed the loopholes in the earlier version. It is expected to be beneficial for investors as it is a government-backed investment option that offers definite and safe returns.

The new KVP consists of a number of regulations and guidelines to avoid any type of misuse. For instance, investors who want to invest more than Rs. 50,000 have to provide a PAN Card proof. Investors also have to provide an income source proof if their investments exceed the limit of Rs. 10 lakhs. The main objective of this scheme is to secure the financial interests of people residing in semi-urban and rural areas since people in such areas easily fall for financial scams and related frauds.

Central govt. has discontinued Kisan Vikas Patra (KVP) Scheme in FY 2011 and reintroduce this in Budget 2014. Moreover, govt. discontinues KVP Post Office Scheme due to the fear of money laundering because it was a bearer instrument. Henceforth, people can invest as well as receive maturity amount in cash.

Discontinuation of KVP hurts savings mobilization of small investors. Subsequently, govt. has reintroduced this scheme with certain modifications. Accordingly, we have specified the kisan vikas patra interest chart and information on KVP Interest Calculator.

Features & Benefits of Kisan Vikas Patra:

  • KVP can be bought by any Indian citizen with a regular income, jointly (with spouse) on on behalf of a minor.
  • The money put in will be doubled in 8 years and 7 months.
  • You can put in denominations of INR 1000, 5000, 10000 and 50000 with INR 1000 as the minimum deposit requirement.
  • You can get one on behalf of a minor.
  • KVP can be bought from any Post office.
  • You can make use of the nomination facility.
  • It can be easily transferred from one post office to another and individual to individual.
  • Certificate you have can be cashed after two years and six months without penalty.
  • A trust can apply for it provided that it meets the KVP guidelines.
  • It is not designed for business institutions or NGOs.

 

 

Kisan Vikas Patra KVP – Types of Certificate

Central govt. sells this instrument which anyone can purchase through any branch of post office. Subsequently, Kisan Vikas Patra instrument is fixed by govt. and candidates can purchase it through cash / cheque / pay order / demand draft. Accordingly, the Kisan Vikas Patra Certificate available is of the following types:-

  • Single Holder Type KVP Certificate – Govt. issues this type of certificate to an adult for himself / on behalf of a minor or to a minor.
  • Joint A Type KVP Certificate – This KVP is issued jointly to 2 adults which is payable to both holders jointly.
  • Joint B Type KVP Certificate – This KVP is issued jointly to 2 adults which is payable to either of the joint account holders.
 

Indian Residents can only invest and purchase KVP certificates and NRI cannot invest in KVP certificate.

Kisan Vikas Patra KVP Post Office Scheme – Modifications

Central govt. has proposed the following modifications while re-launching KVP Scheme:-

  • People will not receive maturity amount in cash but will now receive this directly in their Post Office Savings account.
  • Subsequently at time of purchase of KVP, candidates will not have to follow any KYC norms.
  • In addition to this, Kisan Vikas Patra Interest amount will be subject to a deduction of 10% TDS.
  • Furthermore, beneficiaries will get KVP certificate from post offices only but later they can get it through specified branches of nationalised banks.
 

Any person who wishes to purchase this instrument can submit application form in Form A / A1 in person or through an agent.
Kisan Vikas Patra Form

Form Type

Specification

Form A (No Background Color Form)

This type of form is for direct investment

Form A1 (Colored Background Form)

This type of form is for investment made through an agent.

On cash payment, KVP certificate is issued immediately. However on payment through Cheque / Pay Order/ Demand Draft, this instrument gets issued on the date of clearance of payment. In addition to this, buyer must make a request for identity slip for any future reference.

Kisan Vikas Patra Interest Rate & Maturity Period

A frequent question arises that KVP doubles principal amount in how many months. The maturity period of Kisan Vikas Patra Scheme is 9 years and 10 months (118 months). Accordingly on maturity, the principal amount get doubled. As per the kvp interest calculator, the effective kvp interest rate comes out to be 7.3% (from 1st Jan 2018 onward). Beneficiary can also en-cash the invested amount before the maturity in any of the following conditions:-

  1. If the KVP Certificate holder dies or any of the holder dies (in case of joint account).
  2. If a candidate forfeit a pledge being Gazetted Govt Officer.
  3. Moreover, if selling of KVP certificate is ordered by court of law.
 

Henceforth, candidates can calculate their amount after a particular duration through Kisan Vikas Patra Calculator / KVP Interest Rate Calculator.

Kisan Vikas Patra Calculator / KVP Interest Calculator

People who have purchased these Kisan Vikas Patra Certificates can avail the benefits of this scheme. Moreover, people can now check Kisan Vikas Patra Calculator to check the KVP Interest Rate through the link given below:-
Kisan Vikas Patra Calculator

 

KVP Certificate – Maximum Amount of Investment

Central govt. sells this certificate in denominations of Rs. 1000, Rs. 5000, Rs. 10000 and Rs. 50000. Moreover, there is no maximum limit on the principal amount. Investor can invest any amount and purchase it in multiple denominations.

Kisan Vikas Patra KVP – Amount Redemption
Kisan Vikas Patra holders can redeem this amount through any post office across the country. However if beneficiary wants to redeem this amount from any other post office from which KVP certificate has been purchased, then he / she has to show their identity slip (issued at time of purchase). Moreover if candidates does not possess the identity slip, then he can only redeem it through the same post office.

Interest paid after Maturity Period
Kisan Vikas Patra Maturity period is 9 years and 2 months. If candidates does not receive the amount on maturity then he will be liable to get an interest (equals to the savings account interest) on the due amount.

Kisan Vikas Patra Tax Benefit

Beneficiaries are not entitled to any tax benefits under Kisan Vikas Patra KVP which makes it less attractive for investment.

  1. Kisan Vikas Patra KVP amount of investment cannot be claimed as deduction under Section 80C.
  2. Moreover, the kvp interest rate does not levy Income tax and interest is subject to TDS @ 10% deduction.
 

Kisan Vikas Patra Calculator – Highlights at a Glance

KVP Interest Rate

KVP Minimum & Maximum Amount

7.3% compounded p.a & maturity period is 9 years 8 months

Minimum limit is Rs. 1000 and no Maximum Limit

Features of KVP

Any adult can purchase KVP certificate for himself or on behalf of minor by 2 adults.

Buyers can en-cash their principal amount after 2 and half years.

Nomination facility is available.

KVP certificate can even be transferred from 1 person to other.

It can be purchased through any departmental post office.

There are other Fixed Income earning instruments which provide more benefits to customers through post offices. Most popular of such schemes are PPF Account and National Savings Certificate.

 

 


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