Kisan Vikas Patra Explained

The Kisan Vikas Patra is a government small-savings plan run by the Department of Posts that ensures that the money deposited would be doubled in 110 months, or 9 years and 2 months.

Kisan Vikas Patra is a Rs.1000, Rs.5,000, Rs.10,000, and Rs.50,000 saving certificate. Because these certificates are guaranteed by the Indian government, the subscriber receives a set rate of interest. These certificates may be obtained at any post office and some nationalised bank branches by paying with cash, check, pay order, or DD, depending on the subscriber's preference.

As a result, the Kisan Vikas Patra plan aims to mobilise small investors' money. The name "Kisan" in the plan does not imply that only farmers may invest; rather, any Indian resident can invest in these savings certificates. However, the investments earned under this plan are utilised by the Indian government in farmer welfare schemes. Kisan Vikas Patra has the following major characteristics:

This plan is open to any Indian person who wishes to invest. An adult can purchase the certificate in his or her own name or on behalf of a minor. A trust and two adults can also buy the savings certificate together.

This plan does not allow a commercial entity, such as a corporation or an institute, to invest. Furthermore, NRIs and HUFs are ineligible to invest in these savings certificates.

The lowest amount that may be invested is Rs 1,000 under this plan. However, there is no maximum amount of money that may be invested.

The cash invested in this plan doubles after 110 months (9 years and 2 months), resulting in an annual return of 7.8% for the subscriber. After 100 months, or 8 years and 4 months, the sum placed can be withdrawn.

 Premature encashment of the certificate is not permitted unless the holder dies.

The money invested in Kisan Vikas Patra is not eligible for Section 80 C tax deductions. The interest is completely taxable as income, with tax imposed according to the slab rates. TDS is also taken from interest at a rate of 10%, however withdrawals are free from TDS at maturity.

Due to concerns about money laundering, the Kisan Vikas Patra initiative was terminated in December 2011. However, it was re-launched in 2014 since small investors were having trouble mobilising their money.