Kisan Vikas Patra

Kisan Vikas Patra (KVP) is a savings scheme introduced by the Government of India to encourage long-term investments among citizens. Launched in 1988, KVP offers a secure and reliable investment avenue with the promise of doubling the invested amount over a predetermined period.

Kisan Vikas Patra

 

Key Features of Kisan Vikas Patra

  • Guaranteed Returns: KVP ensures that the invested amount doubles upon maturity, providing investors with assured returns.
  • Interest Rate: As of the fourth quarter of the financial year 2024-2025, KVP offers an interest rate of 7.5% per annum, compounded annually.
  • Maturity Period: The scheme matures in 115 months (9 years and 7 months), at which point the initial investment doubles.
  • Investment Limits: Investors can start with a minimum of ₹1,000, with no upper limit on the investment amount.
  • Eligibility: The scheme is open to all Indian residents above 18 years. Investments can be made individually, jointly by up to three adults, or by an adult on behalf of a minor.
  • Nomination Facility: Investors can nominate a beneficiary, ensuring the benefits of the investment are transferred in case of the investor's demise.
  • Premature Withdrawal: While the lock-in period is 2 years and 6 months, premature withdrawals are permitted under specific circumstances, such as the death of the holder or by court order.
  • Loan Against KVP: Investors can use their KVP certificates as collateral to secure loans from banks and financial institutions.

Kisan Vikas Patra (KVP) Eligibility

To invest in Kisan Vikas Patra, you must meet certain eligibility requirements. Here’s who can apply:

  • Indian Citizens: Only individuals who are residents of India can invest in KVP. Non-Resident Indians (NRIs) are not allowed to invest.
  • Adults: The applicant must be at least 18 years old to apply for KVP in their own name.
  • Minors: A parent or guardian can invest on behalf of a minor child. When the child becomes an adult, the investment is transferred to them.
  • Trusts: Registered trusts can invest in KVP. However, Hindu Undivided Families (HUFs) are not eligible to apply.

Types of Kisan Vikas Patra

Kisan Vikas Patra is available in three different types, depending on how many people are investing together.

  • Single Holder Certificate: This type is for an individual who is investing in KVP for themselves or on behalf of a minor.
  • Joint A Type Certificate: This type is issued to two adults who invest together. The maturity amount is given to both holders or to the surviving holder if one passes away.
  • Joint B Type Certificate: This is also issued to two adults, but in this case, the maturity amount is paid to either of the holders or the survivor.

For both Joint A and Joint B types, the investment is shared between both holders. If one holder passes away, the surviving holder gets full ownership of the investment.

Tax Implications

While the returns from KVP are taxable, the scheme does not offer tax deductions under Section 80C of the Income Tax Act. However, the proceeds upon maturity are exempt from Tax Deducted at Source (TDS).

How to Invest in Kisan Vikas Patra Offline

  • Visit a Post Office or Authorized Bank: KVP certificates are available at all India Post Offices and select public sector banks.
  • Fill Out the Application Form: Obtain and complete Form A, providing necessary personal and investment details.
  • Submit KYC Documents: Provide identity and address proofs, such as Aadhaar card, PAN card, passport, or voter ID.
  • Make the Payment: Invest the desired amount through cash, cheque, demand draft, or pay order.
  • Receive the KVP Certificate: Upon processing, the KVP certificate will be issued immediately or sent via email if requested.

How to Invest in Kisan Vikas Patra Online

  • Visit the India Post website or log in to your internet banking account.
  • Select the Kisan Vikas Patra (KVP) scheme and download Form A.
  • Fill out the form with details like certificate type, investment amount, and payment method.
  • Attach your KYC documents and nomination form, then submit them at the post office or bank.
  • Once verified, make the payment via cash, cheque, pay order, or demand draft payable to the postmaster.
  • If paying in cash, you will receive the KVP certificate immediately. Otherwise, you can request a digital copy via email.

Details Required in the Application Form:

  • Investment amount.
  • Mode of payment (cash or cheque).
  • Type of KVP certificate (Single, Joint A, or Joint B).
  • Co-owner details (if applicable).
  • Guardian and minor details (if purchasing for a minor).
  • Nominee details (name, address, and date of birth).
  • Applicant’s signature and a witness signature (for nomination).

Details Included in the Identity Slip:

  • KVP certificate serial number.
  • Issue price and maturity date.
  • Postmaster’s signature.
  • Additional notes (if issued as a duplicate or transferred).

Note: The identity slip is essential for KVP redemption at maturity, so all details must be filled out accurately.

Documents Required for Kisan Vikas Patra

To apply for Kisan Vikas Patra, you need to provide the following documents:

  • Form A: The main application form.
  • Form A1: Required if applying through an agent.
  • KYC Documents: Aadhaar Card, Passport, PAN Card, or Voter ID.

Once you submit these documents, you will receive a KVP certificate. If you lose or damage the certificate, you can request a duplicate from the issuing post office or bank.

How to Transfer a KVP Account?

Transferring KVP Between Post Offices

Investors can transfer their KVP certificates from one post office to another by submitting a written request. The new account holder must be an Indian resident and meet the eligibility criteria for KVP investments.

Transferring KVP to Another Person

A KVP certificate can be transferred to another individual under specific conditions:

  • Inheritance transfer from a deceased holder to their legal heir.
  • Transfer from an individual owner to joint ownership.
  • Transfer from joint owners to one of the holders.
  • Transfer as per court orders or to a court-appointed person.

Kisan Vikas Patra Maturity Period & Returns

The maturity period for KVP is 9 years and 5 months, at which point the investment amount doubles. For example, an investment of ₹10,000 will grow to ₹20,000 upon maturity. The current interest rate for KVP is 7.5% per annum.

Benefits of Kisan Vikas Patra

KVP is a secure and long-term investment option with several advantages:

  • Guaranteed Returns:
    • Minimum investment starts at ₹1,000, with no upper limit.
    • The invested amount doubles in 9 years and 5 months.
    • The maturity value is clearly mentioned on the certificate.
  • Secure & Risk-Free Investment:
    • Backed by the Government of India.
    • Fixed returns ensure stability.
  • Attractive Interest Rate:
    • A 7.5% annual interest rate provides assured growth.
  • Loan Facility:
    • KVP certificates can be pledged as collateral for loans from banks and financial institutions.
  • Transferable Ownership:
    • KVP certificates can be transferred to another individual with postmaster approval.
  • Tax Benefits:
    • No TDS deduction on maturity proceeds.
    • Interest is taxable and must be reported in income tax filings.
    • Exempt from Wealth Tax.
  • Physical Certificate Format:
    • KVP is issued as a physical certificate (not available in digital or demat form).
    • It cannot be traded in the secondary market.
  • Lock-in Period & Early Withdrawal:
    • Minimum lock-in period of 2 years and 6 months.
    • Premature withdrawals are allowed under specific conditions, with applicable interest adjustments.

How to Encash a Kisan Vikas Patra (KVP) Certificate

If you want to withdraw money from your Kisan Vikas Patra (KVP), you need to visit the post office where you originally bought it. If you prefer to encash it at a different post office, some formalities must be completed before the withdrawal is approved.

To encash your KVP, you must provide the identity slip that was given to you when you purchased the certificate. You also need to submit a written request to the post office where you wish to withdraw your funds. Once your request is processed, you will receive your money.

Premature Encashment (Before Maturity)

Normally, you can only withdraw your KVP after the full maturity period. However, early withdrawal is allowed only after 2 years and 6 months (the minimum lock-in period). Even after this period, premature encashment is permitted only in certain situations:

  • If a court orders it.
  • If a pledged certificate is forfeited by a bank or a government officer.
  • If the certificate holder passes away (or in the case of joint holders, if one of them passes away).

For all other cases, you will need to wait until the maturity date to withdraw your investment.

How to Withdraw Money from KVP

You can close your KVP account before maturity if needed. If you do this, you will get back your invested amount along with the interest earned up to that point. The minimum lock-in period for withdrawal is 2 years and 6 months. This means that you cannot withdraw the money before this time unless there is a legal reason (such as the death of the holder or a court order). To withdraw your money early, you need to submit a written request to the post office. Once your request is approved, the amount will be credited to your account or given to you in cash.

Remember, early withdrawal may reduce the interest earned compared to what you would receive at full maturity.

How to Nominate Someone for KVP

When you buy a Kisan Vikas Patra, you can choose a nominee by filling out Form C. A nominee is a person who will receive the money if something happens to the KVP holder before maturity. You can make the nomination for a single person or multiple people. If a nominee was not chosen at the time of purchase, you can still add one later before the maturity date. To do this, you must submit a filled Form C at the same post office or bank where you bought the KVP. If the KVP holder passes away, the nominee will need to provide proof of identity and the death certificate to claim the investment.

Getting a Loan Against KVP

If you need money before maturity but don’t want to withdraw your KVP, you can take a loan against it. KVP certificates can be used as collateral (security) for a loan from banks and financial institutions.

Here are some key conditions for getting a loan against KVP:

  • The loan applicant must be the owner of the KVP certificate.
  • The loan can be used for personal or business needs, but not for speculation (such as gambling or stock market trading).
  • Different banks offer different interest rates and fees for loans against KVP. Some banks also charge a processing fee.
  • The loan must be repaid before the KVP matures.
  • The loan amount and terms depend on the KVP investment amount and its maturity value.

This option allows KVP holders to get financial support without breaking their investment. However, checking the loan terms with different banks before applying is always a good idea.

Frequently Asked Questions (FAQs) on Kisan Vikas Patra

  • Can Non-Resident Indians (NRIs) or Hindu Undivided Families (HUFs) invest in Kisan Vikas Patra? 
    No, only resident individuals can invest in KVP. NRIs and HUFs are not eligible to participate in this scheme.
  • What is the minimum and maximum investment allowed in KVP? 
    The minimum investment required is ₹1,000, while there is no upper limit on the investment amount. KVP is available in denominations of ₹1,000, ₹5,000, ₹10,000, and ₹50,000.
  • Where can I withdraw my KVP amount once it matures? 
    You can encash the KVP at the same post office or bank where it was purchased. If you choose to withdraw from a different post office, additional verification may be required.
  • Can I transfer my KVP to another person? 
    Yes, you can transfer your KVP by submitting a written request at the post office along with the original KVP certificate. A new certificate will be issued in the transferee’s name. However, transfers are not allowed if the KVP is held on behalf of a minor.
  • What is the interest rate on KVP? 
    The current interest rate on Kisan Vikas Patra is 7.5% per annum.
  • How long does it take for KVP to mature? 
    KVP matures in 115 months, which is equivalent to 9 years and 5 months.
  • What should I do if I lose my KVP certificate? 
    If you lose your KVP certificate, you can request a duplicate from the issuing post office. You will need to submit the identity slip given at the time of purchase. In case the slip is also lost, contact the post office for further steps.
  • Can I withdraw my KVP before maturity? 
    Early withdrawal is allowed only after 2 years and 6 months. However, exceptions are made in cases of court orders, forfeiture, or the death of the certificate holder.
  • What are the tax implications of KVP? 
    KVP does not provide any tax deductions under Section 80C. The interest earned is taxable, but there is no Tax Deducted at Source (TDS) on the maturity proceeds.
  • Can I use my Teachers' Provident Fund to invest in KVP? 
    No, funds from the Teachers' Provident Fund cannot be used for investing in Kisan Vikas Patra.
  • Are cooperative banks or societies allowed to invest in KVP? 
    No, cooperative banks and societies are not eligible to invest in KVP.
  • How will I receive my maturity amount? 
    The maturity amount is directly credited to your bank or post office savings account.
  • What happens if I don’t withdraw my KVP after it matures? 
    If you do not withdraw your KVP after maturity, it will continue earning interest at the post office savings rate until it is withdrawn. However, if withdrawn within one month of maturity, no additional interest is provided.
  • How long does it take to get the KVP certificate? 
    If purchased in cash, the KVP certificate is issued immediately. If paid via cheque, demand draft, or pay order, the certificate is issued after clearance. In case of delays, a provisional receipt is provided.