Interest on KVP

Tax queries 687 views 5 replies

Amit

Professional

123 Points Posted on 24 July 2022

Hi,

What will be the interest income for Income Tax purposes for Rs 1,00,000/- KVP purchased in November 2019 for the FY 2021-22?

Please share the link / chart for calculation.

Thanks,

Amit

Replies (5)

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

211705 Points Posted on 24 July 2022

https://www.caclubindia.com/share_files/kvp-interest-calculator-11278.asp

Amit

Professional

123 Points Posted on 24 July 2022

This KVP interest calculator is not updated and so cannot be used for KVP purchased in the Financial year 2019-20.

Can you share the sheet with the latest calculation?

Dhirajlal Rambhia

SEO Sai Gr. Hosp.

211705 Points Posted on 25 July 2022

On premature encashment of KVP, the amount to be paid depends on the period of holding of the scheme.

For example, the table below indicates the amount required to be paid in case of premature encashment of a Rs.1,000 worth certificate from KVP for the period between 1 July 2019 to 31 March 2020 at interest rate of then 7.6% :

Period of Holding Certificate	Amount to be paid (Inclusive of interest)
Less than one year	Rs.1,000 (No interest)
Minimum: 2.5 years Maximum: 3 years	Rs.1,173
Minimum: 3 years Maximum: 3.5 years	Rs.1,211
Minimum: 3.5 years Maximum: 4 years	Rs.1,251
Minimum: 4 years Maximum: 4.5 years	Rs.1,291
Minimum: 4.5 years Maximum: 5 years	Rs.1,333
Minimum: 5 years Maximum: 5.5 years	Rs.1,377
Minimum: 5.5 years Maximum: 6 years	Rs.1,421
Minimum: 6 years Maximum: 6.5 years	Rs.1,467
Minimum: 6.5 years Maximum: 7 years	Rs.1,515
Minimum: 7 years Maximum: 7.5 years	Rs.1,564
Minimum: 7.5 years Maximum: 8 years	Rs.1,615
Minimum: 8 years Maximum: 8.7 years	Rs.1,722
Minimum:9 years and above Maximum: Before maturity	Rs.1,788
On Maturity	Rs.2,000