regarding KVP interest

Sumit (Service) (26 Points)

23 March 2010  

Dear Sir,

I am a government employee and have purchased KVP of Rs. 300000/-(Three lacs) last year (i.e. Feb 09). I came to know that KVP interest is to be calculated on accrual basis every year and shown in Income from other sources. How do I calculate the interest on it for every year? Or can I leave it now and pay tax on maturity.

Kindly help me in this regard.

Regards,

Sumit