Q: What is a Kisan Vikas Patra (KVP)?
A: The Kisan Vikas Patra is a government savings scheme that allows you to double your money in a fixed amount of time. It is a very safe investment option.
Q: Who can invest in KVP?
A: Any adult Indian citizen can invest in KVP. You can also buy a certificate for a minor (a person under 18).
Q: Where can I buy a KVP certificate?
A: You can buy a KVP certificate from any post office or from select public sector banks.
Q: What is the minimum and maximum investment amount?
A: The minimum amount you can invest is ₹1,000. There is no maximum limit on how much you can invest.
Q: What is the maturity period for KVP?
A: The maturity period for KVP is set by the government and changes with the interest rate. Currently, an investment doubles in 9 years and 7 months (115 months).
Q: How is the interest on KVP calculated?
A: The interest on KVP is compounded annually. This means the interest you earn each year is added to your investment, and the next year’s interest is calculated on the new, larger amount.
Q: Is there any tax benefit for investing in KVP?
A: No, KVP does not provide any tax benefits under Section 80C. The interest you earn is taxable as “income from other sources.”
Q: Can I withdraw my money from KVP before it matures?
A: Yes, you can withdraw your money early, but there is a lock-in period of 2 years and 6 months. If you withdraw before maturity, you will get a reduced interest rate.
Q: How does the KVP calculator work?
A: The calculator takes your investment amount and the current maturity period to show you when your money will double. It uses the official government-declared interest rate for the calculation.
Q: Is KVP a safe investment?
A: Yes, KVP is very safe because it is a savings scheme backed by the Government of India. The returns are guaranteed and not affected by market risks.
Q: Can I use my KVP certificate as collateral for a loan?
A: Yes, you can use your KVP certificate as security to get a loan. Many banks and financial institutions accept KVP as a form of collateral because it is a government-backed investment.
Q: Can I transfer my KVP certificate to another person?
A: Yes, you can transfer your KVP certificate to another person with a written application and the consent of an authorized post office or bank officer. The new owner must also be eligible to hold a KVP.
Q: What happens if I lose my KVP certificate?
A: If you lose your certificate, you can get a duplicate. You will need to file a police report (FIR) and then submit an application to the post office where you bought the original.
Q: Is TDS (Tax Deducted at Source) applicable on KVP interest?
A: No, TDS is not deducted from the interest you earn on KVP. However, the interest income is still considered taxable and must be reported in your income tax return.
Q: How does a joint KVP account work, and who can encash it?
A: A joint account can be opened with up to three adults. For a “Joint A” type, all holders must sign for encashment. For a “Joint B” type, any one of the holders can encash it.
