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Kisan Vikas Patra is a small saving certificate scheme of Indian post office which was introduced in 1988, but was discontinued in 2011. With few amendments and improvisation, it was relaunched in 2014 to encourage long-term financial investment. It was basically introduced for farmers to enable them to save for long-term, but now it is available for all. It is an ideal investment scheme for those who are looking to double their money with reliable means. It is a low-risk saving platform where you can easily and without any doubt invest your precious money. The lock-in period of this investment is 2 years and 6 months. Anybody can encash the amount after the lock-in period and not necessarily wait till maturity.
These schemes are also transferable in nature, as you can transfer from one person to another as many numbers of times, or can transfer from one post office to another within India. The money can be invested by any individual or joint-individuals. These amazing features of Kisan Vikas Patra make it one of the most flexible ways to invest your money and let it get doubled in a few years.
Long-term Savings - The Kisan Vikas Patra certificates can be bought at a minimum amount of Rs. 1000 and there is no upper limit of investment. The value is believed to get doubled in 112 months i.e. 9 years and 4 months. Keep your Kisan Vikas Patra safely as it will help you to receive an amount at the time of maturity.
Security - The Kisan Vikas Patra scheme is among the most trusted way to put your money. Since it is a Government-owned scheme, the returns and security are guaranteed. The amount that you are supposed to receive on maturity is declared on the certificate. So, you will have security on the investment that have been made by you which will be given at the end of the term.
Tax - Benefits – Investment in this scheme does not come under Section 80C deductions and are completely taxable. Though, Tax Deducted at Source (TDS) is exempted from withdrawals after completion of tenure. It is solely the responsibility of the KVP holder to pay the taxes on the interest accrued. This scheme is completely exempted from Wealth Tax.
Fixed Rate of Interest – The interest rate of Kisan Vikas Patra is fixed on the amount that you are investing. This rate of interest ensures doubling of the principal amount in 112 months.
Loan – If you are applying for a loan, then this Kisan Vikas Patra can act as collateral. Most banks and financial institutions accept this certificate as collateral before lending you any loan.
Fixed Lock-in Period - The fixed lock-in period on this scheme is 2 years and 6 months. You can encash this money prematurely, but only after two and a half years from the date of issuance with some amount of interest on the same.
Physical Instruments of Investment – The Kisan Vikas Patra saving scheme comes in a form of simply printed certificate that can be kept safely in a physical form. There is no demand form for this certificate and cannot be traded in the secondary market, but can be used as collateral against any loan.
Non-Transferable – The benefits of Kisan Vikas Patra are availed only by the holder of KVP certificate. But with the permission of the postmaster and few formalities, these certificates can be easily transferred to another name. You can even transfer these investments from one post office to another, but within the geographical boundaries of India.
KVP is a Government-run scheme and offers guaranteed returns. Some noteworthy features of the scheme are:
Certificates are currently available in denominations ranging from Rs. 1,000 - Rs. 50,000.
There is no maximum investment limit in KVP.
Available at all India Post Offices, and KVP form is available online as well as at selected banks.
After two and a half year premature encashment is allowed.
However, the maturity value is printed on the certificate, but the changes can be made based on rate changes by the Ministry of Finance.
Transferrable in nature, KVP can be transferred from one post office to another.
A Kisan Vikas Patra is available in the following types
Single Holder Type Certificate: A KVP certificate issued to an adult for himself or to a minor or on behalf of a minor.
Joint A Type Certificate: This KVP Certificate is issued to two adults jointly and is payable to both the owners or to the survivor.
Joint B Type Certificate: This type of KVP certificate is issued to two adults jointly and is payable to either of KVP holders jointly or to the survivor.
Any Indian citizen who is not a minor can invest in Kisan Vikas Patra at the nearest post office. A minor after consent of any adult can put his money in this scheme. All you need to mention is the date of birth and full name. A trust can also buy one, but Hindu Undivided Family (HUF) or an NRI are restricted to invest their money in this certificate scheme.
Investing in Kisan Vikas Patra can only be done by visiting the nearest Post Office. There is no facility to invest in Kisan Vikas Patra online. The application form for Kisan Vikas Patra is available online and other online tools like Kisan Vikas Patra Calculator, the procedure of application, interest accrual chart and transfer of KVP has made it easy to understand the process of KVP for investors.
Investors who wish to encash their scheme before maturity period can withdraw their premature KVP after two years and six months, which is also the lock-in period. A written application must be submitted to the Post Office after which maturity and the principal, along with the interest can be withdrawn,
An investor of Kisan Vikas Patra can avail a loan against the scheme, but if he fulfils the following condition:
A Kisan Vikas Patra investment must be made on a loan applicant’s name.
The loan against KVP can be availed only if it loan is granted for business or personal purposes.
Every bank has their own charges and interest for loans against KVP. Select banks may even charge a processing fee for loan grant.
The repayment time of loan should be within the tenure of KVP which is 9 years and 4 months.
The margin and loan amount will be decided by the bank based on your KVP investment and maturity.
To get your Kisan Vikas Patra certificate, fill in the application form with all the required information. The required information must also be provided in the identity slip. The following details must be filled in the application form carefully:
The amount of investment for which you want KVP certificate.
The mode of payment which can be either cash or cheque.
Type of KVP certificate you are looking for, whether it is single or joint “A” or joint “B”.
If KVP type if not single, then the name of combined owners is mandatory.
In case of minor, information regarding guardian and date of birth of the minor.
Name of nominees with complete address and date of birth.
This form, duly signed by the investor, along with identity slip with information like the serial number of KVP certificate, issue price, date of encashment etc. must be mentioned correctly and with utmost care.
Kisan Vikas Patra doubles your investment in mere nine years and four months. Investing in Kisan Vikas Patra is not accountable for wealth tax, but the income assimilated from Kisan Vikas Patra interest will be taxed. You can also opt for an online Kisan Vikas Patra calculator that provides all the details regarding your income from investment.
If, in any situation, you have lost or destroyed your KVP certificates, then the deposit holder has an option to go for a duplicate certificate as there is no other way to claim the Kisan Vikas Patra deposit funds, apart from holding this certificate. Thus, a duplicate certificate is essential for keeping the deposits relevant and claimable and it holds the same importance as the original one.
The process for getting a duplicate begins when the investor registers a request for the duplicate certificate in the Post Office. Once the request has been registered, relevant background checks and verification of the information will be done. The Post Office will also consult with the bank before giving out the duplicate certificate.
The encashment of Kisan Vikas Patra can be availed only at the Post Office where it was issued. If you want to encash the KVP from any other post office, then the investor must go through a few formalities and the identity slip need to be submitted.
After the lock-in period of two and a half years from the date of issue of the Kisan Vikas Patra, Premature encashment is also possible.
Can I purchase KVP online?
No, you cannot make an investment in KVP online, but KVP application form is available online.
Can NRI invest in KVP?
No, KVP scheme is open only for resident individuals. NRIs are not eligible to invest in Kisan Vikas Patra.
How can I get a duplicate certificate of KVP?
In case if you have lost your KVP certificate or it is stolen, the account holder can apply for a duplicate KVP certificate. The investor has to show the identity slip that was provided at the time of issue of the original certificate.
How can I invest in senior citizen savings scheme?
The depositor has to visit any deposit office and make an application in Form A. Along with proof of age and amount to be deposited.
In how many years will the FD double?
Your FD investment will double depending on the interest rate at which the deposit had started.
Is Indira Vikas Patra available?
No, after 16 years, Indira Vikas Patra was discontinued.
Is interest on KVP is taxable?
Yes, Interest earned on the KVP is taxable under head Income from Other Sources.
Is Kisan Vikas Patra still available?
Yes, Kisan Vikas Patra is still available.
Is KVP a good investment?
KVP double your investment in 112 months. It is definitely a good saving scheme for those who want to invest in a secure saving scheme.
Is KVP transferable?
Yes, KVP is transferable in nature and can be transferred from one person to another or from one post office to another.
Is Post Office Senior Citizen Savings Scheme interest taxable?
Tax deduction of up to Rs 1.5 lakh can be claimed under Section 80C of Indian Tax Act, 1961.
Is there any tax benefit on Kisan Vikas Patra?
Yes, TDS is exempted from withdrawals after the maturity period.