Kisan Vikas Patra Taxation Hai

Kisan Vikas Patra Taxation Hai; Loan, Maturity, Benefits

Kisan Vikas Patra Taxation Hai; Loan, Maturity, Benefits, It is a small savings instrument that gives people the flexibility to invest in a long-term savings plan. This scheme was started by India Post in 1988. Although the scheme was popular, a government committee constituted in 2011 suggested that the KVP could be misused for purposes such as money laundering. In 2014, Kisan Vikas Patra was relaunched with several changes, including mandatory PAN card proof for investments above Rs 50,000 and income proof for investments above Rs 10 lakh.

The main advantage of KVP (Kisan Vikas Patra) investment is the availability and ease of process; KVP certificates are issued at post offices across the country. Any resident Indian can invest in KVP scheme and obtain the certificate jointly or individually or in the name of a minor. The principal amount invested in KVP will double in 9 years and 4 months (i.e. 112 months) from the date of issue. The main target audience of this scheme is people from semi-urban and rural areas.

Kisan Vikas Patra Key Features | Kisan Vikas Patra Salient features :

(A) Who can open ,
(i) a single adult
(ii) Joint Account (up to 3 adults)
(iii) a guardian on behalf of the minor or on behalf of a person of unsound mind
(iv) A minor above the age of 10 years in his own name.

(B) Deposit :
(i) Minimum Rs. 1000 and in multiples of Rs. 100, no upper limit.
(ii) Any number of accounts can be opened under the scheme.

(C) Maturity:
The deposit will mature on the maturity period prescribed by the Ministry of Finance from time to time as applicable on the date of deposit.

(D) Premature closure :
KVP can be prematurely closed at any time before maturity subject to the following conditions:-

(i) on the death of single account, or of any or all the account holders in a joint account
(ii) on forfeiture by the pledgee being a Gazetted Officer.
(iii) when ordered by the court.
(iv) After 2 years 6 months from the date of deposit.

(E) Transfer of account from one person to another:
KVP can be transferred from one person to another only on the following conditions.

(i) On death of the account holder to the nominee/legal heirs.
(ii) on the death of the account holder to the joint holder(s).
(ii) on the orders of the court.
(iii) on pledging the account to the prescribed authority.

Kisan Vikas Patra Information:

tenure 124 months
Rate of interest 6.9%
investment amount Minimum: Rs.1,000
Max: no upper limit
tax benefits You can avail tax benefits under section 80C of the Income Tax Act, 1961

Kisan Vikas Patra Benefits:

Following are some of the benefits of Kisan Vikas Patra Scheme:

long term savings – Kisan Vikas Patra (Farmer Vikas Patra) With, you can start saving early with as little as Rs. 1000 Kisan Vikas Patra certificates can be purchased for an amount as low as Rs. 1000 and going up as much as you want. There is no upper limit on the amount you want to invest. The price is said to double in 100 months i.e. 8 years 4 months. The value that the holder will receive on completion of the tenure is declared on the Kisan Vikas Patra certificate itself.

100% security We all want security on the investments we make. Kisan Vikas Patra Scheme (Farmer Vikas Patra) That’s all it gives us. Since it is a government owned scheme, the returns are assured and safe. Since the amount you will receive is declared on the certificate, the investment you make and the amount you will receive at the end of the tenure will be protected.

fixed rate of interest – Kisan Vikas Patra (Farmer Vikas Patra) The interest rate is fixed on the amount you are investing. This interest rate ensures double the principal amount in 100 months and is safe as it is a government bond.

Collateral for the loan – Kisan Vikas Patra while applying for the loan (Farmer Vikas Patra) to the certificate Collateral can be used as Most of the banks and financial institutions accept this certificate as collateral before issuing any loan to you.

non transferable – Benefits of Kisan Vikas Patra only Kisan Vikas Patra (Farmer Vikas Patra) The certificate is received by the holder. To transfer it to any other name, the postmaster’s permission is required along with some other formalities.

tax benefits – Kisan Vikas Patra (Farmer Vikas Patra) At the time of encashment or distribution of the scheme, tax is not deducted at source; It is exempt from TDS and is paid in full to the holder. However, it is the responsibility of the certificate holder to pay tax on the interest earned during the tenure of the scheme. The scheme is completely exempt from wealth tax.

physical means of investment – Kisan Vikas Patra (Farmer Vikas Patra) The savings plan comes in the form of a simple printed certificate which can be saved in physical form. There is no demat form for this certificate and it cannot be traded in the secondary market.

fixed lock-in period – Kisan Vikas Patra (Farmer Vikas Patra) The fixed lock-in period on the savings plan is two and a half years. If you have an emergency financial requirement, you can redeem this money prematurely after two and a half years from the date of issue along with some amount of interest.

Types of Kisan Vikas Patra | Kisan Vikas Patra Types

Kisan Vikas Patra comes in the following types.

Single Holder Type Certificate: This type of KVP is issued to an adult individually for himself or on behalf of a minor.
Joint A Type Certificate: This type of KVP is issued jointly to 2 adults and is payable to both the owners or the survivor.
joint b type certificate: This type of KVP is issued jointly to two adults and is payable to either owner or survivor.

Kisan Vikas Patra Maturity Period | Kisan Vikas Patra Maturity Period

The deposit will mature on the maturity period prescribed by the Ministry of Finance from time to time as applicable on the date of deposit.

Kisan Vikas Patra Interest Rate | Kisan Vikas Patra Interest Rate

Interest rates with effect from 01.04.2020 are as follows:-
6.9% compounded annually

Kisan Vikas Patra Encashment | Kisan Vikas Patra Encashment

If you Kisan Vikas Patra (Farmer Vikas Patra) If you want to encash the certificate, you can avail it at the post office where the KVP was issued. If you want to encash it in any other post office, then some formalities have to be completed. To redeem KVP, you need to submit the Identity Slip which was given at the time of KVP certificate purchase. To redeem the KVP certificate, you just need to give a letter in writing to the concerned post office and also present your identity proof.

If you want to withdraw your principal before maturity, you can do so only after 2 years 6 months. Kisan Vikas Patra can be encashed prematurely before maturity under the following circumstances

1. If ordered by a court
2. On forfeiture or forfeiture by a Gazetted Officer
3. On death of the KVP holder or any holder in case of Joint KVP.

Kisan Vikas Patra How to transfer account?

Kisan Vikas Patra Certificate can be transferred from one post office to another post office or from one person to another.

Transfer from one post office to another : Kisan Vikas Patra (Farmer Vikas Patra) The certificate can be transferred from one post office from where it was originally purchased to another post office. To transfer the KVP certificate, the investor has to give handwritten consent to the concerned post office official. Transferee should be a resident Indian and should be eligible to buy KVP certificate.

Transfer from person to person : KVP certificate can also be transferred from one person to another for which a written letter has to be submitted to the post office. The following conditions/specifications are applicable for the same:

1. Transfer in the name of the deceased to his heir
2. From Single Owner to Joint Owners
3. From joint owners to the name of one of the owners
4. From the owner to the judge of law and also to such other persons as may be ordered by the court

Withdrawal of Kisan Vikas Patra | Farmer Vikas Patra Withdrawals

Kisan Vikas Patra (Farmer Vikas Patra) The scheme can be closed before maturity. The principal can be withdrawn along with the interest. Premature withdrawal period of KVP is after 2 years 6 months from the date of issue, which is also the lock-in period. To avail KVP premature withdrawal, the holder has to give in writing to the post office after which the amount will be given. KVP encashment is not permitted unless the KVP holder dies or only on court orders.

Withdrawal of Kisan Vikas Patra | Farmer Vikas Patra Withdrawals

Kisan Vikas Patra (Farmer Vikas Patra) The scheme can be closed before maturity. The principal can be withdrawn along with the interest. Premature withdrawal period of KVP is after 2 years 6 months from the date of issue, which is also the lock-in period. To avail KVP premature withdrawal, the holder has to give in writing to the post office after which the amount will be given. KVP encashment is not permitted unless the KVP holder dies or only on court orders.

Loan on Kisan Vikas Patra | Loan Against Farmer Vikas Patra

The holder of Kisan Vikas Patra can take loan on the same. The following are the terms and conditions for availing loan on KVP:

Loan applicant should have Kisan Vikas Patra in his name.
Farmer Vikas Patra But the loan can be taken only for business or personal purposes. Loan cannot be taken for any speculation.
Different banks have different charges and interest rates for loan against KVP. The charges vary from time to time and select banks may charge a processing fee for loan grant.
The loan should be repaid within the tenure of the KVP.
Margin and loan amount will be decided by the bank on the basis of KVP challan
,

I have shifted to another city. can i do my kvp (Farmer Vikas Patra) Can I encash at post offices here apart from the issuing post office?

Kisan Vikas Patra can be redeemed at any post office if your identity slip is accepted and if it is confirmed by the post office that you are the rightful owner. Ideally, it would be much easier for you if you can redeem your KVP at the issuing post office.

Are cooperative societies and cooperative banks allowed to invest in Kisan Vikas Patra (KVP)?

No, cooperative societies and cooperative banks are not permitted to invest in Kisan Vikas Patra (KVP).

Can I Kisan Vikas Patra (Farmer Vikas Patra) Can I invest in Teacher’s Provident Fund scheme?

No, Teachers Provident Fund is not eligible to invest in KVP.

Can NRI and HUF invest in KVP scheme?

No, KVP scheme is open to resident individuals only. NRIs and HUFs are not eligible to invest in Kisan Vikas Patra.

Is Kisan Vikas Patra (Farmer Vikas Patra) Are there any restrictions regarding the amount that can be invested in?

No, there is no restriction in terms of investment amount. However, there is a minimum limit, which is Rs 1,000. Which means a minimum investment of Rs 1,000 has to be made in this scheme. Thereafter, one can invest in denominations of Rs 1,000, Rs 5,000, Rs 10,000 and Rs 50,000. Also, there is no limit to the number of certificates a person can have.

Kisan Vikas Patra (Farmer Vikas Patra) What is the current rate of interest that can be earned with the scheme?

The current rate of interest applicable to this scheme is 6.9% for the first quarter of FY 2021-22.

Kisan Vikas Patra (Farmer Vikas Patra) What are the tax benefits of investing in

Returns received from Kisan Vikas Patra are not eligible for any tax deduction under section 80C of the Income Tax Act. However, withdrawals made after the maturity of the scheme are exempt from Tax Deducted at Source (TDS).

Is Kisan Vikas Patra (Farmer Vikas Patra) Can be transferred from person to person?

Yes, Kisan Vikas Patra can be easily transferred from one person to another. This can be done by providing a written consent letter to the Post Master. For transfer, the original certificate holder has to submit the original KVP certificate. The new certificate issued will bear the name of the transferee i.e. the person in whose name the certificate has been transferred.

How will the maturity amount be paid?

On maturity of the scheme, the amount payable will be directly credited to the bank/post office savings account of the certificate holder. Therefore, it is important that the certificate holder has a savings account in case they wish to encash their certificate.

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