TDS for Kisan Vikas Patra (Post office)

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32 Points Joined November 2009

Dear Friends,

I know income earned from KVP is taxable. My actual question is

Incase of Bank Fixed deposits, Banks calculate TDS every financial year, if the interest amount crosses 10,000/- then it deduct TDS at 10.3%.

I want to know same for Kisan Vikas Patra, Here Is Post office will deduct TDS every year?

or Is it like, If I invest 2 lakh they will give me 4 lakh after maturity and it is my responsibility to show interest earned as income?

I want to know whether post office will deduct TDS or not?

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On 02 November 2009 at 06:59 Report
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MBA (Finance) B.Com.(P)
3443 Points Joined March 2007

 

Dear Mr. Srinivas,

The KVP deposits are exempt from Tax Deduction at Source (TDS) at the time of withdrawal.

Thanks

Praveen

 

 

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On 02 November 2009 at 10:55
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32 Points Joined November 2009

yes. This I read.

I found the statement " Interest accrued on yearly basis will be taken as income  for Income Tax purposes" in indian postal website.

to make my question simpler. If I invest 10 lakh in KVP, after 8 years 7 months. I must get 20 lakh without any TDS deduction?

Will I get 20 lakh?

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On 02 November 2009 at 11:01
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learner
136 Points Joined October 2008

Dear Srinivas,

Yes, you will get 20 Lacs at the time of maturity, because intrest accrued on deposit will consider as "INCOME FROM OTHER SOURCES". every year you are paying tax on that income (if applicable).at time of maturity there will NO Tax again.

 

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On 05 November 2009 at 13:34
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32 Points Joined November 2009

Oh! Like NSC. Is it? Thank you.

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On 05 November 2009 at 13:41
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learner
136 Points Joined October 2008

Difference is there..

In NSC, accrued Interest amount treated it as a RE INVESTMENT and it is eligible u/s 80 C but it is not possible under KVP.

Regards,

Ravi

 

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On 05 November 2009 at 14:55


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