New Delhi: In view of popular demand, the government on Tuesday will relaunch saving instrument Kisan Vikas Patra (KVP), wherein the invested money will get doubled in 8 years and 4 months.
The KVP, which will be relaunched by Finance Minister Arun Jaitley, will be available in the denomination of Rs 1,000; 5,000; 10,000 and 50,000. There will be no upper ceiling on investment.
“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,” the Finance Ministry said in a statement.
Investments in KVP will remain under a lock-in for a period of 2.5 years and thereafter in any block of six months on pre-determined maturity value.
The Finance Ministry said the KVP will not only provide safe and secure investment avenues to the small investors but will also help in augmenting the savings rate in the country.
“The scheme will also safeguard small investors from fraudulent schemes,” it said, adding that the certificates will double in value after 8 years 4 months.
The collections under the scheme will be available with the Government which will be utilised in financing developmental plans of the Centre and States and will also help in enhancing domestic household financial savings in the country, it said.
The certificates can be issued in single or joint names and can be transferred from one person to any other person/persons, multiple times.
The certificates can be transferred from one post office to another. The certificate can also be pledged as security to avail loans from the banks.
KVP, a certificate savings scheme was launched in April, 1988 and money used to get doubled in 5.5 years. However, the scheme was discontinued in November 2011.
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Things you should know about KVP
- Any citizen of India can invest in KVP in his name, or on behalf of a minor. A trust is also eligible to invest in KVP. Two adults can jointly buy KVP.
- The certificates can be issued in single or joint names and can be transferred from one person to any other person.
- KVP can be transfer from one post office to another anywhere in India and of nomination will be available.
- One can avail loans on KVP from the banks and in other case where security is required to be deposited.
- Investor can encash his certificates after the lock-in period of 2 years and 6 months.
- There are no tax benefits since interest accrued on KVP 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. Also, Tax is not Deducted at Source (TDS); one has to pay tax on the interest accrued.
- Investment can be made in denomination of Rs. 1000, 5000, 10,000 and 50,000.There is no upper ceiling on investment.
- KVP comes with a maturity of eight years and four months.
- Business entities, such as a company or institutions, NRIs or HUF (Hindu Undivided Family) are also not eligible to invest in KVP.
With PTI inputs