Tax on Kusan Vikas Patra by post office
This query is : Resolved
Pratap Reddy
(Querist)
10 December 2019
Can we pay income tax on KVP after maturity if investment or do we have to pay very year?Kisan Vikas Patra investment through post office scheme , the money invested doubles after about 9 years giving about 7.9 percent annual interest.No TDS is deducted , just payout is given and individual has to pay tax as per his tax slab.If the tax can be paid on maturity it will benefit the taxpayer because after 9 years tax slab may increase or person may be retired so instead of being in 30 percent tax slab , person may be in 10 percent slab.Do we have a choice to pay tax only on maturity or do we have to pay every year doing self calculation on tax amount amount of interest earned on basis of a KVP certificate we are holding but not really getting any money in bank.?Also if the KVP deposit is broken earlier before maturity then interest earned is different so how do we calculate interest amount on yearly basis when person is not sure if KVP deposit is going to be encashed only after maturity.
Amol S Joglekar
(Expert)
13 February 2020
Choice is with the assessee whether to show the interest yearwise or at the time of maturity.
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