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Kisan Vikas Patra (KVP) Calculator

Kisan Vikas Patra (KVP) is a money double scheme of government of India where your principal grows at a rate of 6.9% per annum and gets doubled in 124 months (10 years & 4 months). This scheme is available through most of the post-offices of India. Do note that the minimum investment required to begin with this scheme is Rs. 1000 with no upper limit. Moreover, investing a lump sum amount today will get you double the amount by the end of the 124th month.




KVP Interest Rate

Kisan Vikas Patra (KVP) is a savings scheme provided by the Indian Government. Available in all Post Offices of India, the investments made in the scheme are issued as KVP certificates in the name of the investor. KVP scheme provides substantial returns on the completion of its maturity period via high-interest rates. This risk-free investment tool was introduced by India's Government for encouraging its citizens to do long-term savings.

KVP interest rates remain the same for three types of KVP investments, and the variations are based on the number of individuals who are investing in a policy. Investors can opt for three types of KVP plans:

  • Single-holder: This is issued to single investors, for an adult who is applying, or for a minor.
  • Joint A: These certificates are issued to two investors who're parking their funds in this scheme jointly. The interest earned is payable to both of the investors, too.
  • Joint B: These certificates are obtained by two investors jointly too, but the interest is payable to only one individual.

The rates of KVP Interest changes periodically as per the announcements made by India's Finance Ministry, and they remain fixed for the specified quarter. The applicable rate of interest determines the maturity tenure of the investment. For the financial year, 2020-2021, the KVP scheme's rate of interest is 6.9% p.a for an investment tenure of 124 months.

How to use Fintra's KVP Calculator? 

Manually calculating will cause some errors. Hence, use Fintra's KVP Calculator to get accurate results. Fill in the spaces with the required details:

1. Amount Invested

2. KVP Annual Interest Rate

3. Time Period (Years)

Hit the 'Submit' button, and the results will appear on the side of the calculator. 

FAQs about Kisan Vikas Patra (KVP)

 

What are the benefits of obtaining Kisan Vikas Patra (KVP)? 

Currently, due to the KVP’s interest rate, investing in it does appear to be an interesting option for investment. There are numerous benefits associated with this policy, and they’re as follows:

  • Flexibility in investment amount: The values in which the KVP certificates are offered by post offices are Rs. 1,000, Rs. 5,000, Rs. 10,000, and Rs. 50,000. There’s no upper cap, and for any sum of money invested through a combination of available certificates, an investor can earn returns at the high KVP interest rates. Minimum Investment of Rs. 1000 only.
  • Easy application: The application procedure is easy. You can apply for KVPs with any Indian Post Office or an authorized financial institution. The application forms are also available online.
  • Ease of premature withdrawal: After a minimum tenure of 124 months gets completed from the date of the investment, only then premature withdrawal is allowed without any penalty charges.
  • Assured Returns: Due to being a government-backed instrument, returns are guaranteed. However, under some circumstances, the tenure may change, and it depends on the increase or decrease in KVP interest rate.
  • Availability of Nomination Facility: One advantage of investing in KVP certificates is that you can transfer them from one post office to another and from one owner to another.
  • Offers Loan Against Certificate: You can use KVP as collateral for securing loans at desired rates from banks.
  • Tax features: Since KVP interest rate provides substantial returns, there’re no tax benefit on these investments under section 80C of Income Tax Act. However, the interest isn’t subject to TDS (Tax Deduction at Source).
  • Interest Compounded on an Annual basis.
  • In the long run, your funds will get doubled, thus, KVP enables long-term wealth creation as it allows you to stay invested for nearly 10 years. 
  • Post offices provide additional interest on the existing corpus if you don’t withdraw the funds after the completion of tenure maturity. 

 

Can the Post Office issue Duplicate Kisan Vikas Patra?

Under certain circumstances such as a loss, mutilated, defaced, or stolen KVP certificate, you can apply for a duplicate KVP certificate. To do this, you've to provide the identity slip that was provided to you at the time of issue of the original certificate.

 

Should Kisan Vikas Patra be Encashed at the Issuer Post Office Only?

The KVP certificates are easily encashed at the issuer post office. If there's an emergency, you can encash it through other post offices, too. At the time of encashment, you've to show the identity slip along with the KVP certificate.

 

Can Non-Resident Indians purchase Kisan Vikas Patra?

No, NRIs aren't eligible to purchase the KVP certificates.

 

Can Kisan Vikas Patra be bought by the ‘Karta’ on behalf of a Hindu Undivided Family (HUF)?

According to the rules for purchasing KVP, there is no provision of a Kisan Vikas Patra by the ‘Karta’ on behalf of a HUF.

 

Is Kisan Vikas Patra interest taxable?

Yes, KVP's interests are taxable on accrual basis every financial year, and the tax is applied on the same as ‘Income from other sources’.

 

How to encash KVP?

You can encash KVP from the same post office from which it was issued. Certain formalities and applicants are required to be completed to encash KVP from another post office. The identity slip given to you at the time of issue has to be submitted while encashment. Also, if you desire to do premature encashment, then the same process is carried out.

 

Do NRIs avail KVP Certificate?

No, Non-Resident Indian’s (NRIs) cannot acquire KVP certificates and apply for the scheme.



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