Kisan vikas patra - amount of tax?

Tax queries 2488 views 3 replies

Pritam

Titu

25 Points Joined March 2013

Hi!

I inherited(through nomination) a Post Office 'Kisan Vikas Patra' from my mother which was made by her in September of 2003 for a period of 8 years and 7 months and it yeilded 1 Lac rupees. I received the amount in May 2012. My total annual income does not cross 2 Lacs in this financial year(2012-2013) and I have questions regarding this.

1. I have come to know that Kisan Vikas Patra is taxable. If I am correct, then what amount of income tax should I be paying?

2. Am I supposed to pay the tax before the end of financial year 2012-13 which would fall on March 31st 2013 or can I pay it after the date as well?

3. Would the Kisan Vikas Patra be counted in my annual income which is considered for Income Tax?

Thank you.

Replies (3)

Santosh Mishra

1135 Points Joined May 2008

Answer to your first two question is that you are not required to pay any taxes as your annual income does not exceed the basic exemption limit of INR 200,000 ( I have Issumed this is insclusive of Kisan Vikas Patra).

Yes, interest received on maturity would be considered as your income and if your income exceeds the exempted limit you would require to pay tax as per rate applicable on you. ( 10.3% in your case).

Pritam

Titu

25 Points Joined March 2013

Originally posted by : Santosh Mishra
	Answer to your first two question is that you are not required to pay any taxes as your annual income does not exceed the basic exemption limit of INR 200,000 ( I have Issumed this is insclusive of Kisan Vikas Patra). Yes, interest received on maturity would be considered as your income and if your income exceeds the exempted limit you would require to pay tax as per rate applicable on you. ( 10.3% in your case).

Dhanyavad Mishra Ji for the reply! :-)

So if I have understood it correctly, then the interest of Rs. 50,000 earned from Kisan Vikas Patra is taxable ONLY when it pushes through the total annual income tax exemption limit. of Rs. 2,00,000. And therefore, the interest earned from Kisan Vikas Patra is not taxable 'Exclusively' but is 'Inclusive' of the income in a financial year.

Apologies for being silly as I'm quite bad in understanding taxation! :-P

Santosh Mishra

1135 Points Joined May 2008

Interest earned is taxable and it is added to annual taxable income of an individual.

Example:

1) Your other annual taxable income is Rs.150,000 and interest from KVP is 50,000, in this case your total taxable income becomes INR 200,000. You do not need to pay tax.

2) Your other annual taxable income is Rs.170, 000 and interest from KVP is 50,000, in this case your total taxable income becomes INR 220,000. You are required to pay tax on 20000 (220000-200000).

Hope this is clear now.