On 18th Nov 2014, Government of India re-launched one of famous Postal Savings Scheme called Kisan Vikas Patra or KVP. It was mentioned in a Finance Minister’s budget speech also. So let us see its feature and feasibility.
There is no maximum limit specified. However, the minimum will be Rs.1, 000 and in denomination of Rs.1, 000, Rs.5, 000, Rs.10, 000 and Rs.50, 000. In addition, there is no limit in holding a number of certificates from an individual.
What is a period of Kisan Vikas Patra (KVP)?
This certificate will mature after 8 Yrs and 4 months. Your money money will double after 8 Yrs and 4 months. Therefore, interest will be 8.67%, which is annually compounding. For Financial Year 2015-16 the interest on KVP remained unchanged i.e. 8.7%.
Who can invest in Kisan Vikas Patra (KVP)?
As of now, only individuals allowed to invest in KVP. Therefore, this investment is not available for HUF, NRIs or companies.
What will be tax benefits for investing in Kisan Vikas Patra (KVP)?
As of now, you will not get any tax benefit while investing. In addition, earned interest at the end of maturity will be taxable income (taxed according to one’s tax slab, exactly like Bank FDs or NSC). 10% TDS will be there at the time of maturity.
Types of Kisan Vikas Patras (KVP)
How to buy Kisan Vikas Patra (KVP)?
A person desiring to purchase KVP must fill the Application Form A either in person or through agents to the Post Office or to Bank. Purchaser either can make the payment in cash or locally executed Cheque, DD, or Pay Order drawn in favour of the Post Master. In case you want to invest from the savings account, which is with the same post office or bank, then you need to submit duly signed withdrawal form or cheque together with passbook.
When you will get Kisan Vikas Patra (KVP)?
If you purchased KVP by cash, then it will be issued immediately. However, in case you purchased through cheque, DD or pay order, then the issue date will be the realising date of these instruments. In case due to any other reason KVP not issued to you then the provisional receipt will be issued. However, the purchaser needs to exchange it while issuing of KVP certificate. In this case, issue date of KVP will be a provisional receipt issued date.
Is it possible to transfer from one post office or bank to another post office or bank?
Yes, one can transfer it to any post office or other bank without any hindrance. For this, you need to submit Application Form B. This application must be signed by the holder or holders. However, in case of joint holding a single holder signature is enough in case of another holder is dead.
Can we transfer Kisan Vikas Patra (KVP) from one person to another?
You can easily transfer KVP from one person to another person by writing a consent letter to the Post Master of Bank. But do remember that no transfer shall be permitted in respect of Certificate held by or on behalf of a minor till the minor is alive. In all other cases, original holder must submit the KVP original certificate and the new certificate will be issued in the name of transferee.
In addition, one cannot pledge KVP easily unless the holder of the certificate is minor.
Whether can we nominate someone?
Single holder or joint holder of a certificate may nominate by filling Application Form C. You can nominate during the time of purchasing or at any point of time but before maturity. You can cancel or change the nomination by submitting the Application Form D. However, remember that for the first time nomination. But the subsequent nomination or cancellation shall be charged at Rs.20 per each change or cancellation.
Nomination facility not possible if the holder of certificate is held by or on behalf of the minor.
What if you not encash after maturity?
If you not encash the certificate even after the maturity period, then you will receive the post office savings interest rate which is applicable at that time on the whole amount payable to you on maturity. If you encash the certificate within one month from maturity, then no such interest will be payable.
What if you lost or destroyed certificate?
You can apply for a duplicate certificate if you lost it. But you need to submit an indemnity bond for the same along with identity slip. In case of mutilated or defaced certificate, you need to submit the original such defaced or mutilated certificate to get the original certificate.
Where to encash Kisan Vikas Patra (KVP)?
You can encash it in the same post office or bank where it is registered. In case of the different bank branch or post office then it may get delayed as the internal verification is required.
Whether one can encash it before maturity?
There is a lock in period of 2 Yrs and 6 months i.e. 30 months. After that, you can encash it before maturity. However, it may be liquidated even earlier too in case of below mentioned situations.
Below is tabular representation of premature withdrawal table.
How the maturity amount is payable?
It will be directly credited to your savings account of post office or Bank. So at least while encashing the certificate at maturity one must have a savings account.
Is it the best product to invest?
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View Comments
Respected Sir , We deposited KVPS with automatic renewal. Due to my husband met with major accident, surgery we suffered. We shifted our house. Later we noticed that our KVIPS which are OUTSTANDING lost. We requested POST OFFICE to inform status of our KVPS which are OUTSTANDING by giving details of
our KVIPS in which some are outstanding and some are closed. But Divisional Office issued FICTITIOUS CERTIFICATE THAT ALL OUR KVPS are closed. We requested to FURNISH details of PAYMENTS made on CLOSURE AS each of our KVPS values more than Rs.10000 and payment is allowed only through Bank Cheques. DIVISIONAL OFFICE is not FURNISHING DETAILS THOUGH WE ARE REQUESTING SINCE ONE YEAR. WITHOUT NOTICE OF POST MASTER, WE REQUESTED COUNTER CLERK BY PROVIDING ALL OF OUR KVPS WHICH ARE BOTH CLOSED , SOME ARE OUTSTANDING. WE REQUESTED CHEQUE NUMBER ISSUED, CERTIFICATE CLOSED, DATE OF CHEQUE, AMOUNT ETC., DIVISIONAL OFFICE IS NOT RESPONDING. WHAT TO DO?
Dear Subra,
There is no option of auto renewal in KVP. Regarding the closed status, I strongly request you to take a legal route rather than running behind them. Mainly because they are arrogant and least bother about your sufferings.
Hello sir
My mother did kvp in post office in 2010
and it matured in December 2018.we want to encash it but we moved to another state and it is really difficult to
Visit that post office now. Can we take money from the post office where we live now?
Dear Pandey,
Try your luck.
Hi,
If I want to pay tax annually on my invested kvp...what documents do I need to submit for the same for taxing? Is any statement needed as I have only certificate o kvp
Dear Radhika,
You just have to mention in your ITR.
SIR,
We are NSC and KVP purchased on Octo'2008 from Oridsha in the name of my wife and my self individual. When my job transferred we are transferred all NSC and KVP our local post office in my native place on 2010 and the said NSC has already been matured on 2014 and post office released the amount on time and KVP has already been matured on May'2017. But post office refused the encashment due to Finacle No. not mentioned on the KVPs. Please advise us how to realize the all KVPs. All original KVPs and copy of transferred letter keep with us.
With Regards,
Rajat Bose
Dear Rajat,
It is not a big issue. As you have an original certificate of KVP, you have all rights to request for redemption. Let them give in writing.
Hello sir,
My mother invested in Kishan vikas patra from early 1990s and reinvested the amount received in the same scheme post maturity, now after 30 years we have found out that some of the reinvestments that she made around 1998 in kisan vikas patra are missing.
We approached the post office as well, but since it was during the non computer era we were told we won’t be able to find records from 1990s of my mother’s investment in KV.
So we want to understand if you are aware about how many years records for KV are maintained and how can we get a statement of her investment since the beginning that is from 1990.
Dear Mohit,
It is hard for me to answer the Post Office internal data management system related. Better you approach the Post Office and complain.
Can wife of. Non resident indian invest in minor name in kisan Vikas Patra and she is Residing in India and indian citizen
Dear Ravidranath,
Yes.
MY FATHER HAVE PURCHASED A KVP. NOW HE WAS NO MORE. I HAVE LOST THE KVP CERTIFICATE. BUT I WAS NOMINEE IN THIS. WHAT IS THE PROCESS AND WHICH DOCUMENTS ARE NECESSARY.
Dear Dr.Kanj,
Approach the regional Post Office for the same at first to find the details of KVP.
I purchased KVP in name of my Son when he was minor. Now he major, do I need to file tax also does the inetrest gets clubbed with my income?
Dear Kash,
The income will be of your son.
Hi sir, my mother in law has opened kvp few years ago and my father in law is nominee of that kvp. Mother in law expired few years ago and we don’t have the kvp and father in law doesn’t know the number & dont have any duplicate copy . All he know is kvp was suppose to get mature in April 2019 . Can father in law being the nominee get the full amount which had been expired last year
Dear Apurva,
Better you first contact the regional Post Office and get the KVP details.
Hello Sir,
Good day.
I bought KVP in the name of my niece, who is a minor, at Banglore Head postoffice. We moved to Andhra Pradesh later and the certificates are matured now. When we requested to get them transferred to the local Head Post Office to encash them, they checked the details online and said the name of the guardian/Nominee is not mentioned. Could you please guide/suggest on how to proceed further.
Thank you.
Dear Nish,
How they issued without mentioning the GUARDIAN name? It is their fault if they issued in the name of minor.