Kisan Vikas Patra
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
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.
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.
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.
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
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.