What is Kisan Vikas Patra? Salient Features of KVP

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Kisan Vikas Patra(KVP) is a risk free investment scheme re-launching today, which was discontinued in 1st December 2011. This scheme is for people who are less risk averse and are looking for stable income. Under this scheme money doubles in 100 months, interest is compounded annually. Interest rate is said to be at 8.4%.

How to invest in Kisan Vikas Patra 2014?

The scheme is offered by India post office. One can fill the form and submit it along with cash or cheque and your photograph. The certificate will be issued only after the cheque has been realized by the Post Office.

The certificate will be issued by Post office called as "Kisan Vikas Patra" with your name, amount, date of maturity and amount on the date of maturity.

What is Kisan Vikas Patra?

Who can invest in KVP?

Any citizen of India can invest in Kisan Vikas Patra in his name, or on behalf of a minor. A trust is also eligible to invest in KVP. Two adults can jointly buy KVP.

Business entities such as a company or institutions. NRIs or HUF (Hindu Undivided Family) are also not eligible to invest in KVP.

Features of KVP

1) Investment can be made in denomination of Rs. 1000, 5000, 10,000 and 50,000.There is no upper ceiling on investment.

2) KVP comes with a maturity of eight years seven months

3) The certificates can be issued in single or joint names and can be transferred from one person to any other person.

4) KVP can be transfer from one post office to another anywhere in India and of nomination will be available.

5) One can avail loans on KVP from the banks and in other case where security is required to be deposited.

6) Liquidity: Investor can encash his certificates after the lock-in period of 2 years and 6 months.

7) Simple interest is calculated for initial 2.5 years, after which it is compounded annually.

8) No PAN number is required for investment in Kisan Vikas Patra

Tax Benefit:

There are no tax benefits since interest accrued on Kisan Vikas Patra is taxable. The only KVP Tax benefit is that there is no Wealth Tax liable on Kisan Vikas Patra. KVP has complete exemption from Wealth-Tax. Also, Tax is not Deducted at Source(TDS), One has to pay tax on the interest accrued.


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