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Sunday, February 21, 2010

Kisan Vikas Patra,kvp post office

Kisan Vikas Patra (KVP) is a saving instrument that provides interest income similar to bonds. Amount invested in Kisan Vikas Patra doubles on maturity after 8 years & 7 months. Some people have a misconception that only a farmer can invest money in Kisan Vikas Patra. However, it is absolutely false. Anyone wishing to invest money at safe places can go for Kisan Vikas Patra.

How to Invest
One can invest in any head post office / sub-post office in cash, demand draft, or local cheques. You just have to walk into a post office, and meet a clerk looking after KVP issues. He will give you a form. You just have to fill the form and submit it with the desired amount. A KVP would be issued to you. However, be mindful of taking a few of photographs of yours with you. You would need them to put on the form.

Who Can Invest
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
Tabs and Denominations
Kisan Vikas Patra are available in the denominations of Rs 100, Rs 500, Rs 1000, Rs 5000, Rs. 10,000 and Rs. 50,000. There is no maximum limit on purchase of KVPs.

Withdrawl
Premature encashment of the certificate is not permissible except at a discount in the case of death of the holder(s), forfeiture by a pledgee and when ordered by a court of law.

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
  • Facility of reinvestment on maturity.
  • Maturity proceeds which are not drawn are eligible for Post office Savings account interest for a maximum period of two years.
Salient Features
  • 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
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.

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Kisan Vikas Patra


  • Minimum Investment Rs. 500/- No maximum limit.
  • Rate of interest 8.40% compounded annually.
  • Money doubles in 8 years and 7 months.
  • Two adults, Individuals and minor through guardian can purchase.
  • Companies, Trusts, Societies and any other Institution not eligible to purchase.
  • Non-Resident Indian/HUF are not eligible to purchase.
  • Facility of encashment from 2 ½ years.
  • Maturity proceeds not drawn are eligible to Post office Savings account interest for a
    maximum period of two years.
  • Facility of reinvestment on maturity.
  • Patras can be pledged as security against a loan to Banks/Govt. Institutions.
  • Patras are encashable at any Post office before maturity by way of transfer to desired
    Post office.
  • Patras are transferable to any Post office in India.
  • Patras are transferable from one person to another person before maturity
  • Duplicate can be issued for lost, stolen, destroyed, mutilated and defaced patras.
  • Nomination facility available.
  • Facility of purchase/payment of Kisan vikas Patras to the holder of Power of attorney.
  • Rebate under section 80 C not admissible.
  • Interest income taxable but no TDS
  • Deposits are exempt from Wealth tax.

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