Kisan vikas patra:-
Financial schemes that double an investment in a reasonable period of time have always attracted people. These schemes can be targeted to situations when money becomes scarce to fulfill needs of a person’s life. Kisan vikas patra is one such scheme from Indian post office that doubles one time investment in a period of 96 months. If a person purchases kisan vikas patra for Rs.5,000 he/she will be getting back Rs.10,000 by the end of 8 years and 4 months.
How kisan vikas patra works:-
Kisan vikas patra works on an interest rate that is compounded annually. KVP certificate has a Lock-in period of 30 months from the date of purchase. Since the interest rate is compounded annually the longer the period of deposit the higher is the earning. By the end of 96 months the amount invested on purchase will be doubled.
Salient features of kisan vikas patra:-
Kisan vikas patra with the backup of Indian government is trusted by people all over the country. The scheme can be accessed from any post office by a person who is above 18 years of age. KVP can be purchased by an adult for self or on behalf of a minor, in a joint name, or by a trust. KVP cannot be purchased by NRI's and members of a Hindu undivided family.
Kisan vikas patra with the backup of Indian government is trusted by people all over the country. The scheme can be accessed from any post office by a person who is above 18 years of age. KVP can be purchased by an adult for self or on behalf of a minor, in a joint name, or by a trust. KVP cannot be purchased by NRI's and members of a Hindu undivided family.
- The Finance Ministry has said that there will not be requirement of Permanent Account Number or PAN in puttig money in relaunched Kisan Vikas Patra.
- Initially the certificates will be sold through post offices, but the same will soon be made available to the investing public through designated branches of nationalised banks.
- An investor can encash his certificates after the lock-in period of 2 years and 6 months and thereafter in any block of six months on pre-determined maturity value.
- The investment made in the certificate will double in 100 months.
- There are no tax benefits as of now for investments in the scheme that will yield an annual rate of nearly 8.7 per cent, more than most other small savings instruments.
- KVP has a maturity of eight years and Four months and during this period KVP can be transferred from one individual to another under standard rules and procedures.
- The KVP form has to be filled and submitted along with cash/cheque/draft at the post office. An identity slip may be procured from the post office. At the time of maturity, the KVP has to be submitted at the same post office for redemption. However, maturity proceeds can be claimed from any post office by submitting the identity slip received at the time of application of KVP.
- The certificate can also be pledged as security to avail loans from the banks and in other case where security is required to be deposited.
- The facility of transfer from one post office to another anywhere in India will be available
Premature withdrawal:
1. If the money is withdrawn before the completion of one year, no interest is payable.
2. After one year and before the lapse of 2 years 6 months a simple interest is applied to the deposit amount
3. Any time after 2 years and 6 months, but before the maturity period, interest is calculated as per Government regulations. - The maturity proceeds of KVP continue to earn bank interest as specified from time to time till it is withdrawn by the investor.
- Two or more people can purchase KVP jointly and the conditions of amount payable at the end of period have classifications accordingly.
- KVP is available in denominations of Rs.1000, Rs.5,000, Rs.10,000 and also Rs.50,000. There is no maximum limit for investments in KVP. Denominations of Rs 50,000 are available only at head post office of a place.
- Investment in KVP does not enjoy any tax rebate. The interest accrued every year is treated as income and taxed accordingly. No TDS is deducted on the principal amount or interest at the time of withdrawal.
Factors to be considered while purchasing KVP:-
There are few factors that a person needs to be aware of while investing in a KVP.
- KVP is a certificate that will have the amount invested and amount payable at maturity with date of commencement and date of maturity mentioned. If this certificate is lost during the term then a duplicate certificate can be obtained on application. To be on the safer side a person can ask for a slip that acts as an identity for purchase of KVP from the post office during purchase. This slip can be produced during the application for duplicate KVP in case of loss or mutilation. However these certificates are not available in electronic media as of now which eliminates instances of loss/mutilation/theft, etc.
- On untimely death of KVP holder, the amount on maturity will be payable to nominee. If there are no nominees then the amount will be payable to legal heir of the KVP holder. At the time of purchase there is a clause in KVP form that gives the person an option to choose nominee during the plan term. A KVP holder can always state a nominee during the term of KVP by signing to this particular clause.
- Since the investment in KVP is not eligible for deduction under Section 80C, it is most suited for individuals who have completed their requisite investments for qualification under Section 80C.
Kisan vikas patra serves as a steady income for senior citizens during their retirement years. With minimum conditions and maximum transparency in the scheme, it is easy for a person to understand working of KVP unlike most of the plans (with hidden clause) provided by private organizations.
Govt. notifies revised ‘Kisan Vikas Patra Rules’
MINISTRY OF FINANCE
(Department of Economic Affairs)
NOTIFICATION
New Delhi, the 23rd September, 2014
GSA- 705(E).—ln exercise of the powers conferred by section 12 of the Government Saving Certificates Act, 1959 (46 of 1959) and in suppression of the Kisan Vikas Patra Rules, 1988 except as respects things done or omitted to be done before such supersession, the Central Government hereby makes the following rules, namely:—
1. Short title and commencement.—(1) These rules may be called the Kisan Vikas Patra Rules, 2014
(2)They shall come into force on the day of their publication in the Official Gazette. 2.
2. Definitions.—In these rules, unless the context otherwise requires, –
(a) “Act” means the Government Savings Certificates Act, 1959 (46 of 1959);
(b) “cash” means the cash in Indian currency;
(c) “Certificate” means the Kisan Vikas Patra;
(d) “Form” means a Form annexed to these rules;
(e) “Post Office” means any departmental post office in India doing Savings Bank work;
(f) “Bank” means any branch of State Bank of India and its associate banks, designated branches of Nationalised and other commercial banks, authorized for Public Provident Fund Scheme;
(g) words and expressions used herein and not defined but defined in Post Office Savings Certificate Rules, 1960 shall have the meanings respectively assigned to them in those rules.
3. Application of Post Office Savings Certificate Rules, 1960.—The provisions of the Post Office Savings Certificate Rules, 1960 shall, so far as may be, apply in relation to matters for which no provision has been made in these rules.
4. Denomination of Certificates.—The Kisan Vikas Patra shall be issued in denominations of 1,000/-, Rs. 5,000/-, Rs.10,000/- and Rs. 50,000/-.
5. Purchase of Certificate.—Any number of Certificates of the denominations specified in rule 4 may be purchased.
6. Type of Certificates and issue -(1) The Certificates shall be of the following types, namely :—
(a) Single holder type Certificates;
(b) Joint ‘A’ type Certificates; and
(c) Joint B’ type Certificates.
(2) (a) A single holder type Certificate may be issued to – (a) an adult for himself or on behalf of a minor or to a minor;
(b) A Joint ‘A’ type Certificate may be issued jointly to two adults payable to both holders jointly or to the survivor.
(c) A Joint `B’ type Certificates may be issued jointly to two adults payable to either of the holders or to the survivor.
- Procedure for purchase of Certificate.—(i ) Any person or persons specified in rule 6, desiring to purchase a Certificate, shall present an application in a Form A either in person or through an authorised agent of the small savings schemes at a Post Office or Bank.
(2) Payment for the purchase of a Certificate may be made to a Post Office or Bank in any of the following modes, namely:—
(i) by cash; or
(ii) by locally executed cheque, pay order or demand draft drawn in favour of the Post Master; or
(iii) by presenting a duly signed withdrawal form or cheque together with the passbook for withdrawal from Savings Account standing in credit of the purchaser at the same Post Office or Bank.
8. Issue of Certificates.—(1) On payment being made under rule 7, except where payment is made by a cheque, pay order or demand draft, a Certificate shall be issued immediately and the date of such Certificate shall be the date of payment.
(2) Where payment for the purchase of a Certificate is made by cheque, pay order or demand draft, the Certificate shall not be issued before the proceeds of the cheque, pay order or demand draft, as the case may be, are realised and the date of such Certificate shall be date of encashment of the cheque, pay order or demand draft, as the case may be.
(3) If for any reason a Certificate cannot be issued immediately, a provisional receipt shall be given to the purchaser which may later be exchanged for a Certificate and in such a case the date of Certificate shall be the date of provisional receipt.
9. Transfer from Post Office to Bank and vice-versa.–(1) A Certificate may be transferred from a Post Office or Bank at which it stands registered, to any other Post Office or Bank to the holder or holders making an application in Form B either at Post Office or Bank.
(2) Every such application shall be signed by the holder or holders of the Certificate :
Provided that in the case of Joint ‘A’ type Certificate or Joint ‘B’ type Certificate, the application may be signed by one of the joint holders if the other is dead.
10. Transfer of Certificate from one person to another.—(1) A Certificate may be transferred from one person to another with the consent in writing to an officer of the Post Office or Bank as specified in the Table below (hereinafter referred to in these rules as authorised Post Master or Bank Officer) :—
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