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Interest on KVP

Amit (Professional) (115 Points)

24 July 2022

Hi,

What will be the interest income for Income Tax purposes for Rs 1,00,000/- KVP purchased in November 2019 for the FY 2021-22?

Please share the link / chart for calculation.

Thanks,

Amit

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5 Replies

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177840 Points)
Replied 24 July 2022

https://www.caclubindia.com/share_files/kvp-interest-calculator-11278.asp

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Amit (Professional) (115 Points)
Replied 24 July 2022

This KVP interest calculator is not updated and so cannot be used for KVP purchased in the Financial year 2019-20.

Can you share the sheet with the latest calculation?

Dhirajlal Rambhia (SEO Sai Gr. Hosp.) (177840 Points)
Replied 25 July 2022

On premature encashment of KVP, the amount to be paid depends on the period of holding of the scheme.

For example, the table below indicates the amount required to be paid in case of premature encashment of a Rs.1,000 worth certificate from KVP for the period between 1 July 2019 to 31 March 2020 at interest rate of then 7.6% :

Period of Holding Certificate	Amount to be paid (Inclusive of interest)
Less than one year	Rs.1,000 (No interest)
Minimum: 2.5 years Maximum: 3 years	Rs.1,173
Minimum: 3 years Maximum: 3.5 years	Rs.1,211
Minimum: 3.5 years Maximum: 4 years	Rs.1,251
Minimum: 4 years Maximum: 4.5 years	Rs.1,291
Minimum: 4.5 years Maximum: 5 years	Rs.1,333
Minimum: 5 years Maximum: 5.5 years	Rs.1,377
Minimum: 5.5 years Maximum: 6 years	Rs.1,421
Minimum: 6 years Maximum: 6.5 years	Rs.1,467
Minimum: 6.5 years Maximum: 7 years	Rs.1,515
Minimum: 7 years Maximum: 7.5 years	Rs.1,564
Minimum: 7.5 years Maximum: 8 years	Rs.1,615
Minimum: 8 years Maximum: 8.7 years	Rs.1,722
Minimum:9 years and above Maximum: Before maturity	Rs.1,788
On Maturity	Rs.2,000