Kisan Vikas Patra 2014: Double Money in 8 years and 4 months
Once popular, saving instrument Kisan Vikas Patra has been launched by the Government yesterday, promising to double money in 100 months i.e maturity of the certificate will be 8 years and 4 months.
Recommended Read: Kisan Vikas Patra 2014 Rules Notified
Taxation of Kisan Vikas Patra
At present there are No Tax Benefits.
Unlike PPF Invested amount cannot be claimed as deduction 80C and accrued interest on Kisan Vikas Patra is taxable under the head Income from Other Sources. The only 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.
Salient Features of Kisan Vikas Patra 2014 are:
- Kisan Vikas Patra will be made available in the denomination of Rs.1,000, Rs.5,000, Rs.10,000 and Rs.50,000.
- There will be no upper limit of investment i.e. an investor can invest any amount.
- The certificate can either be issued in single or joint names but only to Indian Citizens (HUF, NRI and other business organisation cannot invest in KVP).
- The certificates will be easily transferable and can be transferred multiple times from one person to another.
- Also the facility of transfer from one post office to another anywhere in India and of nomination will be available.
- The certificate can also be used as collateral security to avail loans from the banks or as a security deposit.
- Initially the KVP certificates will be sold through post offices, but the same will soon be made available to the investing public through designated branches of nationalised banks.
- Kisan Vikas Patra can be encashed after the lock-in-period of 2 years and 6 months and thereafter in any block of six months on pre-determined maturity value.
- To Invest in KVP, investor has to submit his KYC documents and if investment is of more than Rs.50,000 than PAN is also required to be submitted.
- In case the investment is more than Rs.10 lakhs than investor has to disclose the source of the funds. This move will ensure that black money will not be invested like earlier.
- The investment will be doubled in 100 months with an annual yield rate of nearly 8.7 per cent. Simple interest is calculated for initial 2.5 years, after which it is compounded annually.
Maturity of Rs.1,000 after each block of 6 months
|2 and half years but less than 3 years||1201|
|3 Years but less than 3 and half years||1246|
|3 and half years but less than 4 years||1293|
|4 Years but less than 4 and half years||1341|
|4 and half years but less than 5 years||1391|
|5 Years but less than 5 and half years||1443|
|5 and half years but less than 6 years||1497|
|6 Years but less than 6 and half years||1553|
|6 and half years but less than 7 years||1611|
|7 Years but less than 7 and half years||1671|
|7 and half years but less than 8 years||1733|
|8 years but before the maturity of the Certificate||1798|
|On maturity of Certificate
8 years and 4 months (100 months)
Should you Invest in KVP?
With no tax benefits and interest rate is almost same as Bank Fixed, KVP is not a investment scheme to go for. Also there is a lock-in-period of 2.5 years which is not in the case of Bank FD. So one should go for Bank FD instead of investing in Kisan Vikas Patra.