KVS Features and Benefits
There are many Kissan Vikas Patra benefits that you can avail by purchasing KVP. Some of them are:
- One can start a saving habit by buying KVP of the lowest value i.e. Rs. 100. KVP can be bought from Rs. 100 to Rs. 50000 face value (Rs.100, Rs.500, Rs.1000 Rs.5000, Rs.10000 and Rs.50000. The value that the holder will receive on completion of eight years and seven months is declared on the KVP itself.
- There is no upper-limit for buying or owning these KVPs.
- The most important of the many Kissan Vikas Patra benefits is that, being a Government scheme that encourages small savings, it is completely secure. Small investors who want security for their investment find the KVP ideal.
- The fixed rate of interest that assures doubling of the principal amount in eight years and seven months is secured as it is a government bond. However, the inflation would erode the value and that cannot be controlled.
- Many finance companies and banks accept Kisan Vikas Patra as collateral against loan for housing etc.
- Kissan Vikas Patra benefits can be availed only by the holder of the KVP since KVP is issued in the name of the holder and cannot be transferred without completing due formalities. To get the KVP transferred on any other name the permission of the Post Master is required.
- The value of the Kisan Vikas Patra is the value at issuance and those that are encashed prematurely get the amount invested with some interest if they are encashed after a lock-in period of two and half years.
- Kissan Vikas Patra benefits do not include being traded in the secondary-market.
- Kissan Vikas Patra benefits include the simplicity of use of these certificates. KVPs are physical instruments that are held as printed certificates. There are no demat forms of these certificates.
- There are no direct KVP tax benefits since interest accrued on Kisan Vikas Patra is taxable.
- The only KVP Tax benefit is that there is no Wealth Tax liable on Kisan Vikas Patra. KVP has complete exemption from Wealth-Tax.
- The another benefit from the KVP tax benefits available (if it can be called a benefit) is that at the time of disbursal or encashment of the KVP, tax is not deducted at source (TDS) but is paid in full to the holder. It is the responsibility of the holder of KVP to pay the taxes on the interest accrued.
- Premature withdrawal of the KVP is also allowed and the full invested amount and same interest is paid to the holder after two and a half years of issue of the certificates.
KVS Features and Benefits
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