The Indian post office has a saving scheme name Kisan Vikas Patra (KVP) certificate scheme which doubles invented money in a period of 124 months (10 years & 4 months).
If you purchase the certificate after 1 April 2020. For instance, a Kisan Vikas Patra Certificate for Rs. 10000 will get you a corpus of Rs. 20,000 postmaturity.
Interest payable, Rates, Periodicity, etc.
From 01.04.2020, interest rates are as follows:-
- 6.9 % compounded annually
- Amount Invested doubles in 124 months (10 years & 4 months)
Minimum Amount for opening of an account and maximum balance that can be retained
Minimum of Rs. 1000/- and in multiples of Rs. 100/- No Maximum Limit.
Types of Certificates Available
A Kisan Vikas Patra certificate scheme can be of the following types:
- Single Holder Type Certificate: This kind of certificate is issued to an adult for self or on behalf of a minor or to a minor.
- Joint ‘A’ Type Certificate: This type of certificate is issued jointly to two adults, payable to both the holders jointly or to the survivor.
- Joint ‘B’ Type Certificate: This type of certificate is issued jointly to two adults, payable to either of the holders or to the survivor.
Also Read This Here is How to Open Sukanya Samriddhi Yojana (SSY) Account?
The following is the eligibility criteria for investing in the KVP scheme:
- The applicant has to be an adult resident of India.
- A parent/guardian may invest on behalf of a minor.
- Hindu Undivided Families (HUFs) and Non-Resident Indians (NRIs) cannot invest in Kisan Vikas Patra.
Documents Required to get Kisan Vikas Patra Certificate
The applicant must furnish copies of the following documents to get KVP certificate:
- Identity proof for KYC process (Aadhaar card/PAN/Voter ID card/Driving License/Passport)
- KVP Application Form
- Address Proof
- Date of Birth certificate
Taxability of Kisan Vikas Patra
There are no tax-benefits available under this scheme. The interest accrued is taxable under ‘Income from Other sources’, paid every year. And, TDS of 10% is subtracted from the interest. However, the final amount on maturity is exempted from tax deductions.
Benefits of Kisan Vikas Patra
KVP is not designed to attract investors looking to save tax. The principal amount and interest do not have any tax deductions. However, it still offers a few key benefits to investors. Some of those benefits are explained here :
- Guaranteed returns as a KVP certificate are a government-backed instrument.
- Long-term wealth creation as a Kisan Vikas Patra allows you to stay invested for close to 10 years and doubles your money.
- Flexible investment instrument as there is no upper cap on KVP.
- Kisan Vikas Patra can be used as collateral for securing loans at preferred rates from banks.
- Transferable from one person to another as well as from one post office to another.