Kisan Vikas Patra Tax Rules: Post Office's Kisan Vikas Patra (KVP) is a scheme in which your investment is guaranteed to be doubled.
On investing in Kisan Vikas Patra, you have to pay tax on the interest income earned. Whereas, under the Section 80C of the Income Tax Act you do not get any tax benefit on the amount deposited in this scheme.
The interest received on the amount deposited in Kisan Vikas Patra comes under taxable income. The tax is levied in two ways, the first option is cash basis taxation and the second is tax on annual interest. In the first option, the interest received on maturity is added to income and then tax is deducted as per the tax slab. Whereas in the second option, the tax is deducted every year.
Under the Kisan Vikas Patra Scheme, any adult above 18 years of age can open an account. Whereas the account can be opened on behalf of the minor by his parents or guardian. NRIs and Hindu Undivided Families (HUFs) are not eligible to purchase KVP certificates.
You are getting interested at the rate of 7.5 per cent per annum on the amount deposited in Kisan Vikas Patra and your money doubles in 115 months i.e. 9 years and 7 months.
The minimum amount of investment in this scheme is Rs 1000, whereas no limit has been set regarding the maximum investment in it.
Compiled by Syed Muskan