Finance Minister Arun Jaitley re-launched the Kisan Vikas Patra (KVP) scheme today i.e. on 18.11.2014 to encourage savings among investors.
Falling Interest - Trouble For Investors - The Government substantially reduced interest rates payable on Kisan Vikas Patra (KVP) from 7.80% to 7.70% w.e.f. 01.10.2016.
The features of re-luanched Kisan Vikas Patra (KVP):-
Who can Purchase KVP
Any adult individual singly or two adults jointly.
A guardian on behalf of a minor.
Any above eligible person or persons can purchase KVPs by submitting an application on Form A either in person or through an authorised agent of the small savings schemes at a Post Office or Bank.
Minimum & Maximum Amount Can be Invested
Minimum Amount - Rs. 1,000/- and further Kisan vikas Patras are available in denominations of Rs. 1000, 5000, 10,000 and 50,000.
Maximum Amount- No Limit
Lock-in Period
Minimum Lock-in Period is 2 years 6 months
Maturity Period
8 years & 4 months for investment upto 31.03.2016
01.04.16 onwards doubles in 110 months (9 years & 2 months)
Interest Rate & Maturity Value
Upto 31.03.2016 - 8.70% per annum. - Money doubles in 100 months i.e. 8 years 4 months.
01.04.2016 onwards - 7.80% per annum. Money doubles in 110 months i.e. 9 years 2 months.
01.10.2016 onwards - 7.70% per annum. Money doubles in 112 months i.e. 9 years 4 months.
Nomination facility
Nomination facility is available
Transferability of KVP
KVPs may be transferred from a Post Office or Bank at which it stands registered, to any other Post Office or Bank to the holder or holders making an application in Form B either at Post Office or Bank.
KVPs may be transferred from one person to another with the consent in writing to an officer of the Post Office or Bank as specified in the Table below (hereinafter referred to in these rules as authorised Post Master or Bank Officer)
On an application being made in the prescribed form by the transferor and transferee, the Postmaster may permit the transfer of any certificate (pledging of certificate) as a security.
Premature Encashement / Payment before Maturity
Facility for premature encashment available after 2 years 6 months that are purchased on or after November 2014
Purchase period
Amount Payable of KVP of Rs. 1000/-
Less than 1 year
Rs. 1000/-(no intt. Would be paid)
2 years 6 months or more but less than 3 years
1201
3 years more but less than 3 years 6 months
1246
3 years 6 months or more but less than 4 years
1293
4 years or more but less than 4 years 6 months
1341
4 years 6 months or more but less than 5 years
1391
5 years or more but less than 5 years 6 months
1443
5 years 6 months or more but less than 6 years
1497
6 years or more but less than 6 years 6 months
1553
6 years 6 months or more but less than 7 years
1611
7 years or more but less than 7 years 6 months
1671
7 years 6 months or more but less than 8 years
1733
8 years or more but less than 8 years 7 months
1798
On maturity
2000
Interest Payable after Maturity
Where repayment of the amount, inclusive of interest, under the rule 16 has become due but the same has not been made, then interest shall be allowed on the amount due on the date of repayment of the amount subject to the following conditions:-
The interest shall be simple and shall be calculated at the rate applicable to Post Office Savings Accounts of the type of single or joint account from time to time.
For the purpose of payment of interest, any part of the period which is less than one month shall be ignored.
The interest shall be paid to the depositor in lump sum at the time of repayment of the amount due.
Deduction under section 80C
Deduction under section 80C is not available
Interest Taxability
Taxable
Loan against KVP
Loans can be availed from banks on pledge of KVPs
If KVP Lost / Stolen / Destroyed
If a KVP is lost, stolen, destroyed, mutilated or defaced, application may be made showing particulars of the KVP with circumstances attending such loss, theft, destruction, mutilation or defacement for issue of duplicate KVP to the Post Office where the KVP is registered. If the Officer-In-Charge is satisfied, he shall issue a duplicate KVP on the applicant furnishing an indemnity bond in the prescribed form with sureties or with a bank's guarantee.
Provided that where such application is made with respect to a Certificate mutilated or defaced, a duplicate Certificate may be issued without any such indemnity bond, surety or guarantee, if the Certificate mutilated or defaced is surrendered and the Certificate is capable of being identified as the one originally issued.
KVP Certificates Types
Single holder type Certificates are issued to an adult for himself or on behalf of a minor or to a minor.
Joint 'A' type Certificates are issued jointly to two adults payable to both holders jointly or to the survivor.
Joint 'B' type Certificates are issued jointly to two adults payable to either of the holders or to the survivor.
Summary of Features of re-luanched Kisan Vikas Patra (KVP) :-
KVP will be available in the denomination of Rs 1,000, 5,000, 10,000 and 50,000, without an upper ceiling on investment.
The investment made on or after 01.04.2016 in the certificate will double in 110 months i.e 9 years 2 months.
The certificates can be issued in single or joint names.
It offers an annualized return of 7.8% w.e.f. 01.04.2016 and requires to pay tax on the interest that accrues on the investment.
No need to provide PAN ( Permanent Account NUmber) to purchase KVP.
KVPs would be like bearer instruments.
KVP can be transferred from one person to any other person / persons, multiple times.
KVP has the facility of transfer from one post office to another anywhere in India.
KVPs have a lock-in period of 2.5 years. It has a feature where an investor can encash his certificates after the lock-in period and thereafter in any block of six months on pre-determined maturity value.
KVP can be pledged as security to avail loans from banks and also used to promise in places where security is required to be deposited.
KVP certificates can be issued in single or joint names and can be transferred from one person to another several times.
Initially, the certificates will be sold through post offices but the same will soon be made available to the investing public through designated branches of nationalised banks.
Any individual can safely invest and save their money in the form of Kisan Vikas Patra.
Business entities such as a company or institutions, NRIs and Hindu Undivided Family are not eligible to invest in KVP.