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KVP Interest, Tax and ITR in India - citizen guide 2026

If you put money in a Kisan Vikas Patra today, it doubles in 115 months at the current 7.5 percent rate, but the interest is fully taxable as income from other sources and no TDS is cut, so the tax is your job to declare.

Quick answer: KVP gives no Section 80C deduction. The interest is taxable in your hands as income from other sources at your slab rate. The post office does not deduct any TDS, so you must declare the interest yourself in your ITR, either every year on accrual or as one lump sum in the maturity year. Current rate is 7.5 percent per year, doubling the money in 115 months.

What Kisan Vikas Patra is

Kisan Vikas Patra (KVP) is a fixed return small savings certificate from the Government of India, sold through post offices and some authorised banks. You invest a lump sum and it doubles over a fixed period set each quarter by the Finance Ministry. It carries a sovereign guarantee, so the capital is safe.

Scheme and tax position

KVP runs under the Government Savings Promotion Act and the Kisan Vikas Patra Scheme 2019, administered by the Department of Posts and the National Savings Institute under the Ministry of Finance.

On tax, two rules matter and both are regime neutral, so they apply whether you are on the old or the new regime.

A key point that confuses many people: no TDS is deducted on KVP. The interest is not paid out year by year. It is rolled into the doubling value and paid only at maturity, so the post office has no annual credit event to deduct tax against. That is the opposite of a bank fixed deposit, where the bank cuts TDS. Because nothing is withheld for you, you carry the full responsibility to report the interest and pay the tax.

Current rate and doubling period

You can estimate returns for any small savings option using the Post Office Return Calculator.

Investment basics

Step by step: how to buy KVP

  1. Visit a post office or an authorised bank branch.
  2. Fill the KVP purchase form and complete KYC with your identity and address proof.
  3. Pay by cash, cheque, demand draft or transfer for the amount you want.
  4. Choose single or joint holding and add a nominee.
  5. Collect the certificate or the passbook entry showing the purchase date and maturity value. The purchase date fixes both your doubling period and your 30 month lock-in.

Step by step: how to declare KVP interest in ITR

  1. Work out the interest that accrued during the year. The simplest way is the difference between the certificate value at the end of the year and at the start, using the post office maturity schedule.
  2. In your ITR, add this amount under Income from Other Sources.
  3. You have two lawful choices. Accrual method: declare the interest every year as it builds up. Receipt method: declare the whole interest in the year the certificate matures and pays out.
  4. Accrual is usually the cleaner choice. It spreads the income so one big lump at maturity does not push you into a higher slab in a single year. Pick one method and stay consistent.
  5. Since no TDS was cut, there is nothing to claim back, so pay any tax due through advance tax or self assessment tax.

Documents required

Common mistakes

Real-life example: Kashvi Pathak bought a ₹2,00,000 KVP at her local post office on 10 April 2026 at 7.5 percent. It will double to ₹4,00,000 in 115 months. The post office cut no TDS. Each year she works out the accrued interest from the maturity table and adds it to her ITR under income from other sources, paying tax at her slab. She kept ₹2,00,000 of taxable interest from landing in one maturity year, which would have pushed her into the 30 percent slab that year.

Sample note to the Assessing Officer

To
The Assessing Officer
[Ward or Circle]

Subject: Disclosure of accrued interest on Kisan Vikas Patra

Sir or Madam,

I hold Kisan Vikas Patra certificate number [number], purchased on
[date] for ₹[amount] at the post office at [branch]. As the scheme
pays no annual interest and the post office deducts no TDS, I am
declaring the interest that accrued during the financial year
[year] under Income from Other Sources, computed from the official
maturity schedule, as ₹[accrued interest]. The corresponding tax
has been paid as self assessment tax vide challan [challan number].

Yours faithfully,
[Name]
PAN: [PAN]

You can also use an RTI to ask the post office for the exact maturity and accrual schedule of your certificate. Draft it with the AI RTI Drafter.

Frequently asked questions

Does KVP give a Section 80C deduction?

No. Unlike NSC and PPF, KVP investment does not qualify for any deduction under Section 80C. It gives no tax break at the time of investment.

Is KVP interest taxable?

Yes. The interest is fully taxable as income from other sources at your normal slab rate, under both the old and the new regime.

Is TDS deducted on KVP?

No. KVP pays no annual interest, so there is no annual credit for the post office to deduct against. You must self declare the interest and pay the tax yourself.

Should I declare KVP interest every year or at maturity?

Both are lawful. Accrual means declaring it every year as it builds. Receipt means declaring the whole amount in the maturity year. Accrual usually avoids a single large taxable spike.

What is the current KVP interest rate and doubling period?

7.5 percent per year for the April to June 2026 quarter, which doubles the money in 115 months, that is 9 years and 7 months.

When can I encash KVP early?

Only after 2 years and 6 months (30 months) from purchase. Before that, early closure is allowed only on the death of the holder or by a court order.

Is the maturity amount of KVP taxed again?

The principal is your own money and is not taxed. The interest portion is what is taxable. If you already declared it on accrual each year, you do not tax the same interest again at maturity.

Where can I buy KVP?

At any post office and at selected authorised banks. The minimum is ₹1,000 with no upper limit.

Sources