Post Office Kissan Vikas Patra
Kisan Vikas Patras is a saving instrument backed by the Government of India that provides interest income similar to the Government bonds. Since the amount invested in Kisan Vikas Patra doubles on maturity after 8 years & 7 months, it serves as an excellent investment option as well. As an investment option, KVP is beneficial for those looking for a safe avenue of investment without the pressing need for a regular source of income. KVP’s are quite popular with the salaried and middle income group people in India since the invested amount gets doubled at maturity.
How to invest in KVP
Kisan Vikas Patra is available in all head post offices and other Authorized post offices throughout India. Once the prescribed form is filled and money submitted, the certificate will be issued by the post office. The post office issues an identity slip along with the certificate. This signed identity slip helps the purchaser to get a duplicate certificate in the event of loss of the original certificate and also assures the smooth encashment of certificate on maturity. Two photographs of the investor are needed at the time of the filling up of form. The minimum investment in KVP is Rs 100. Certificates are available in denominations of Rs 100, Rs 500, Rs 1,000, Rs 5,000, Rs 10,000 and Rs 50,000. The denomination of Rs 50,000 is sold through head post offices only. There is no limit on holding of these certificates. Any number of certificates can be purchased. A KVP is sold at face value; the maturity value is printed on the Certificate.
Who Can Invest in Kissan Vikas Patras
Kisan Vikas Patra can be purchased by the following:
- An adult in his own name, or on behalf of a minor
- A Trust
- Two adults jointly
Who is not Eligible
Commercial Companies and institutions are not eligible to purchase KVP.
NRIs and Hindu Undivided Families cannot purchase Kisan Vikas Patra.
Maturity Amount and Period
The post-office Kisan Vikas Patras (KVPs) offers a fixed rate of interest, currently at 8.41 (2009) per cent per annum compounded half yearly which are subject to vary. The maturity period is 8 years and 7 months and Money doubles on maturity. Encashment is possible from two and half years. There is facility to reinvest the amount on maturity.
Salient Features of KVPs
KVPs can be pledged as security against a loan to Banks/Govt. Institutions.
KVPs are transferable to any Post office in India.
KVPs can be transferable from one person to another person before maturity.
Nomination Facility is available in case of KVPs
Duplicate can be issued for lost, stolen, destroyed, mutilated and defaced KVPs
Tax Benefits on KVPs
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.
Loss of Certificate:
In the event of loss or theft of the Certificate, the purchaser should report to the post office at the earliest. An application should be submitted in the post office containing the certificate number, amount, date of purchase /maturity etc. It should also declare the circumstances that resulted in 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 indemnity bond/declaration/Bank verification.