Kisan Vikas Patra (KVPs) {Updated 2019} – A Best Tax Saving Scheme

Who Can Apply?

  • Any adult individual can purchase KVPs in his own name (single holder type) or jointly with another individual with the condition ‘jointly or survivor’ (A Type) or ‘either or survivor’ (B type).
  • An adult individual can purchase KVPs (single holder type) on behalf of a minor. Besides, a minor can also purchase KVP for himself.

Where to Apply?

  • KVPs are issued by all departmental Post Offices authorised to transact savings bank business and all public sector banks and ICICI Bank, Axis Hank and HDFC Bank authorised for this purpose.2

How to Apply?

  • The application in Form A along with payment has to he deposited with the Post-Office directly or through its authorised agent.
  • The payment is to be made in cash or by cheque/pay order/ demand draft or by presenting a withdrawal form along with the pass book of a Post Office Savings Bank Account.

Aadhaar Number

  • An applicant should furnish his Aadhaar Number or proof of enrolment for Aadhaar, at the time of application.
  • Ex1stmg KVP holders are also required to furnish their Aadhaar Number latest by 31.3.2018.

Nomination

  • The facility of nomination is available on all KVPs (including the joint holder type), except for the KVPs purchased by or on behalf of a minor.

Denomation

  • W.e.f.1.7.2016, KVPs may be issued for any amount above Rs. 1000 and in multiples of Rs.1000.
  • One transaction of an investor on a day shall result in on certificate in e-mode or one entry in passbook.
  • Earlier, KVPs were in the denominatons of Rs.1,000, Rs. 5,000, Rs.10,000 and Rs. 50,000.

Certificate one-mode

  • W.e.f. 1.7.2016, physical pre-printed certificates shall be discontinued and KVPs shall be issued either on exclusive electronic-mode or passbook mode.
  • Issue of.KVP shall be conveyed to the investor electronically (by e-mail/on mobile).
  • KVP in e-mode can be accessed online only by the investor through electronically secured means. Under Passbook mode, KVP shall be issued in prescribed format printed on a passbook under signature of authorized official.

Maturity Period

  1. A Kisan Vikas Patra shall mature after 9 years and ten months [9 years and 7 months for KVP is issued during 1.7.2017 to 31.12.2017,
  2. 9 years and 5 months for KVP is issued during 1.4.2017 to 30.6.2017,
  3. 9 years 4 months for KVPs issued during 1.10.2016 to 31.3.2017,
  4. 9 years and two months for KVPs issued during 1.4.2016 to 30.9.2016,
  5. 8 years and four months for KVPs issued upto 31.3.2016] from the data of issue.
  6. The amount payable on maturity up to the KVP of 1000 denomation shall be Rs. 2000 (proportionately for other denominations.)

Post Maturity Interest

Where on maturity, the amount has become due not but not paid, it shall ‘carry interest from the date of maturity up to the date of repayment at the prevailing POSB A/c rate.

Encashment

  • The KVPs are encashable on maturity at the post office at which they were registered or at any other post office in India after the officer-in-charge verifies (from the office of registration) the entitlement of the person presenting the KVPs for encashment.
  • The person entitled to receive maturity amount shall discharge the KVP on its back in token of having received the payment.
  • In case of KVP purchased on behalf of a minor who has since attained majority at the time of encashment, the KVP shall be discharged by such. person himself and his signature attested either by the person who is known to the Post Master or Bank Officer.

Premature Encashment

  • Premature encashment (before 2 years) is allowed under specific circumstances only, such as death of the holder(s), forfeiture by a pledgee being a Gazetted Govt. Officer or under Court’s order.
  • In this case, face value of the KVP with simple interest at the prevailing POSB rate for the complete months only shall be payable.

In case of premature encashment after 2 in half years, the amount payable on a KVP of Rs.1000 denomination, shall be as follows:

Completed Period (Years)Amount Payable (Rs.)
KVPs issued during
23.9.2014 to 31.3.201601.4.2016 to 30.09.201601.10.2016 to 31.3.201701.04.2017 to 30.6.201701.07.2017 to 31.12.2017101.01.2018 to 31.3.2018 2
21/2120111801176117311711165
3124612201215121112081201
31/2129312611255125112471238
4134113031296129112861277
41/2139113471339133313281316
5144313921383137713701357
51/2149714391429142114141399
6155314871476146714591443
61/2161115371524151515061488
7167115891575156415541534
71/2173316431626161516041581
8179816981680166716551630
81/217551735177217081681
918141793177817631733
91/218191787
Maturity200020002000200020002000

Transferability of Kisan Vikas Patras

  • A Kisan Vikas Patra Allowed after one year from the date of purchase, by “applying to the Post Master/Bank Officer and getting the transfer registered.
  • Transfer within one year is permitted under specific cumstances only, namely, transfer to a heir or nominee of a deceased holder, under court’s order, on pledging, or to the survivor in the event of death of a joint holder. On transfer, the original certificate shall be discharged and a new certificate shall be issued in the name of the transferee, KVPs held by or on behalf of a minor shall not be transferable if the “nor is alive.
  • Transfer of KVPs issued in electronic mode or passbook mode shall be allowed after due diligence and changes in electronic database, and cancellation of the passbook already issued and reissue of passbook in the name of transferee.

Pledge

  • KVPs may be pledged as security to a Government/RBI/ Bank/ Corporation or Government Company/local authority/ notifies housing finance company.
  • W.e.f. 1.7.2016, KVP on passbook mode shall be eligible for pledging throughout the country. On verification of data in the passbook, the amount of pledge shall be freezed, and released similarly after verification. once pledged, the KVPs shall not be transferable till the security is released.
  1. Vide Notification No. G.S.R. 862(E), dt. 30.6.2017
  2. Vide Notification No. F.No. 1/4/2016-NS, dt. January, 2018

9 thoughts on “Kisan Vikas Patra (KVPs) {Updated 2019} – A Best Tax Saving Scheme”

  1. It has been told to me by the post office that KVP is discrded and only available scheme availaible is NSC..

  2. hi… it what world you are….? this KVP was discarded by the Govt in this year budget and now it is not available. why mislead …..? Ravi

    • Dear Ravi,
      Please note, KVPs are available in all Post Offices in India. I also purchased in the month of March 2015.It is true,these were not available in the financial year 2011-2012/2012-2013.

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