Kisan Vikas Patra, popularly known as KVP, is a small savings scheme that is offered in the form of certificates in Indian Post Offices. This savings plan is a fixed-rate savings plan that aims to increase your money once a set length of time has passed that is during 124 months (10 years and 4 months).
The account can be opened by any adult or on behalf of a minor. Also, a minor who is above the age of 10 in his own name. While three individuals together can open a joint account.
Interest rate for the quarter ending June 30, 2022 is 6.9 % which is compounded annually.
How much investment can be made
There is no upper limit and the minimum is Rs. 1000 in multiples of Rs. 100. One can open any number of accounts.
KVP can be pledged and transferred
KVP can be pledged or transferred as security by submitting a regulated application form, along with a pledgee’s acceptance letter.
Transfer/pledging can be made to the following authorities.
-> The President of India/Governor of the State.
-> RBI/Scheduled Bank/Co-operative Society/Co-operative Bank.
-> Corporation (public/private)/Govt. Company/Local Authority.
-> Housing finance company.
KVP premature closure
KVP may be closed before maturity at any time if the following requirements are met: –
(i) When a single account, or any or all of the account holders in a joint account, passes away.
(ii) On forfeiture by a pledgee being a Gazette officer.
(iii) When order by court.
(iv) After 2 years and 6 months from the date of deposit.
(v) Transfer of account from one person to another person
Tax benefits
The scheme is not eligible for tax deductions under Section 80C of the Internal Revenue Code, and the returns are fully taxable. Nonetheless, withdrawals after the maturity period are exempt from TDS (Tax Deducted at Source).
To transfer from one person to another person, the following are the criteria according to Post Office:
(i) On the death of account holder to nominee/legal heirs.
(ii) On the death of account holder to joint holder(s).
(ii) On order by the court.
(iii) On pledging of account to the specified authority.
