CURRENT AFFAIRS

Detailed explanation-1: -The Central Government reduced the interest rate of the Kisan Vikas Patra scheme by 70 basis points (bps). The interest rate was reduced from 7.6% to 6.9%. The maturity period was also increased from 113 months to 124 months.

Detailed explanation-2: -Kisan Vikas Patra interest rates 2023. Deposits made into KVP accounts will now earn an interest rate of 7.2% annually compounded. Earlier the interest rate offered on KVP was 7%. At 7.2% interest, the investment in the KVP account will double in value after 120 months.

Detailed explanation-3: -It doesn’t come under the 80C deductions, and the returns are completely taxable. However, Tax Deducted at Source (TDS) is exempt from withdrawals after the maturity period.

Detailed explanation-4: -There are no tax benefits available under this scheme. The interest accrued is taxable under ‘Income from Other sources’, paid every year. And, TDS of 10% is subtracted from the interest. However, the final amount on maturity is exempted from tax deductions.

Detailed explanation-5: -Kisan Vikas Patra is a small savings instrument that will facilitate people to invest in a long term savings plan. It is a popular investment instrument given that is of low-risk and also guarantees assured returns. Rate of Interest: 7.2% w.e.f 01.01. 2023 to 31.03.