Kisan Vikas Patra Benefits – Kisan Vikas Patra is a government backed scheme which provides flexible investment instruments in the form of certificates. It is a scheme which allows the people to get a good return on their investments after a fixed period of time.
Kisan Vikas Patra can be purchased and issued by selected public sector banks and Indian post offices. This scheme gives the account holder an interest rate anywhere between 6.9% to 7.7% which can double the investment of the card holder in nearly 124 months.
Kisan Vikas Patra Benefits
Since Kisan Vikas Patra is a government backed scheme, it comes with numerous benefits which can be useful for small investors. Some of those KVP benefits are mentioned below:
Tax Benefit in Kisan Vikas Patra
There are no particular tax benefits for the investors under this scheme, that means the returns obtained by the KVP scheme will be taxed under the “Income from other sources” category. However, still the investors can enjoy tax benefit under section 80C which gives them tax benefit upto Rs. 1.5 Lakh.
Security and Credibility of Kisan Vikas Patra
Since KVP is a government backed instrument, thus there is complete security to the investors regarding their returns, which means they will definitely get pre pre-declared amount at the end of the investment tenure. The final amount which the investor will get is mentioned in the certificate issued at the starting which gives the investor assurance of their returns.
Collateral for Loan in Kisan Vikas Patra
Kisan Vikas Patra has one more very important benefit that is KVP can be used as security/collateral for loans taken by the KVP holder. He/She can apply for a loan based on their KVP certificate with the help of an acceptance letter issued by the pledgee which in this case can be President of India, Governor, RBI, Co-operative banks and societies, Public and private corporations, local authorities and Housing finance companies.
Cost of Investment in Kisan Vikas Patra
KVP can be started with investments which can be as small as Rs 1000, thus it is beneficial for small investors. They can deposit any amount in multiples of 1000. However, if they want to deposit more than Rs 50,000, then they have to submit their PAN details for further procedure.
Fixed Maturity Period of Kisan Vikas Patra
Another great benefit of KVP is that there is a fixed period of 124 months set by the government after which the investor can get their final amount as declared in the certificate issued earlier. Fixed Maturity period gives a sense of security to the investor that their money’s safe and they will get their return after a fixed time period.