Taxability of kvp

As far as I know Interest on KVP is taxable on accrual basis and will be taxed as Income from Other Sources

NSC

1)  On Investment - Deduction u/s 80 C is allowed

2) Accrual of Interest  - Taxable under Income From Other Sources(If accrual method is followed) + Deduction u/s 80 C is allowed since amount of Interest gets reinvested. 3) On Maturity of NSC - Principal as well as Interest (if cash method is followed) is Taxable under Income from Other Sources..(There are few schemes in which only Interest is taxable)

KVP

1) On Investment - No deduction is available u/s 80 C

2) Interest - Taxable every year if accrual method is followed otherwise entire amount of Interest is taxable on maturity.

3) Maturity - Principal is not taxable..

 

There is no incentive for investment in KVP. deduction under section 80C is not allowed on investment in KVP. 

Interest on KVP is Taxable every year if accrual method is followed otherwise entire amount of Interest is taxable on maturity and will be taxed as Income from Other Sources. TDS is not deductible on Interest on KVP.

on Maturity - Principal amount is not taxable.. interest received is taxable under Income from other sources, if it was not taxed on accrual basis.