Thursday, July 18, 2024

Post Office Kisan Vikas Patras

Note : This Scheme has been reintroduced from 2014 with an renewed interest rate of 8.70%.

What is Kisan Vikas Patras?

Kisan Vikas Patras is a safe and long term investment option backed by the Government of India which provides interest income similar to bonds. The title of the scheme makes some misconception that it is only meant for farmers. But anyone can open Kisan Vikas Patra. KVP is beneficial for those looking for a safe avenue of investment without the pressing need for a regular source of income. Money doubles in 100 months. (8 years and 4 months)

How to invest ?
Kisan Vikas Patra is available in all head post offices and other Authorized post offices throughout India. After filling up the prescribed form and submitting money, the certificate will be issued after the realization of cheque, pay order or DD. The post office will issue an identity slip along with the certificate. This signed identity slip will help the purchaser to get a duplicate certificate from loss of the same and also assures the smooth encashment of certificate on maturity. 

Who can Invest ?
Kisan Vikas Patra can be purchased by any adult individual singly or jointly, minor through guardian or a registered trust where commercial companies, societies, institutes or NRIs and Hindu Undivided families are not eligible to purchase KVP. 

Minimum investment and range of investment in KVP:
The minimum investment in KVP is Rs 1000. Certificates are available in denominations of Rs 1000, Rs 5000, Rs 10,000, Rs 50,000. The denomination of Rs 50,000 is sold through head post offices only. There is no maximum limit. Any number of certificates can be purchased. A KVP is sold at face value; the maturity value is printed on the Certificate.

Maturity amount and period:
The post-office Kisan Vikas Patras (KVPs) offers a fixed rate of interest, earlier at 8.41 (2009)  to currently at 8.7 (2014) per cent per annum compounded half yearly which are subject to vary. The maturity period is 8 years and 4 months (100 months) and Money doubles on maturity. Encashment is possible from two and half years. There is facility to reinvest the amount on maturity. 

Tax Benefits:
No income tax benefit is available under the Kisan Vikas Patra scheme. Interest income is taxable, however, the deposits are exempt from Tax Deduction at Source (TDS) at the time of withdrawal. KVP deposits are exempt from Wealth tax.

Salient Features:

KVPs can be pledged as a security against a loan
It can be transferable to any post offices in India
KVPs can be transferable to one person to other before maturity.
Nomination Facility is available.

Loss of Certificate:

In the case of loss or stolen Certificate, the purchaser should report the post office at the earliest. An application  should submit in post office containing the certificate number, amount, date of purchase /maturity etc. and declare the circumstances resulting the loss of certificate. In such cases the identity slip comes useful to get a duplicate certificate. After the verification, the post office will issue a duplicate certificate. If needed, the purchaser will have to submit an indemnity bond/declaration/Bank verification.