Hello Friends,
One of my clients got compensation from Insurance Company for an accident in which he lost his spouse. The court allowed claim for the client and his two children. Now as the children were minor and also the client did not need money at that time, they got their money invested in Kisan Vikas Patra (KVP). Now, as the children have attained majority and KVPs are also about to mature, he wants to know whether the amount receivable from the maturity is taxable or not?
As far as I know, interest on KVPs has no tax rebate (unlike NSCs). So, what would be the taxability on maturity of these KVPs?
Both my client and his children had income below Minimum Exemption Limit under Income Tax Act in all the accruing years.
CAclubindia
