How is the interest in Kisan Vikas Patra calculated?

Kisan Vikas Patra (KVP)is a safe small-savings scheme provided by the Indian post office and backed by the Indian government. It is designed in such a way that the invested principal amount is doubled at the time of maturity. Hence, the duration is decided with respect to the interest rate. Right now, KVP is giving 6.90 per cent and accordingly the duration is 124 months (10 years four months). One of our readers wanted to know how the interest is calculated in KVP and how it is taxed.

This article was originally published on July 12, 2022.