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.

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.

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.

• No Section 80C benefit on investment. Unlike NSC or PPF, money you put into KVP does not reduce your taxable income. KVP gives no tax break at the time of investment.
• Interest is taxable as income from other sources under the Income Tax Act, charged at your normal slab rate. There is no special exemption and no Section 80TTA or 80TTB cover for it.

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.

• Interest rate: 7.5 percent per year, set by the Finance Ministry for the April to June 2026 quarter and unchanged from the previous quarter.
• Doubling period: 115 months, which is 9 years and 7 months. A ₹1,00,000 certificate becomes ₹2,00,000 at maturity.
• Rates reset every quarter, so the doubling period can change for certificates bought in a later quarter. The 115 month figure applies to certificates bought while the 7.5 percent rate is in force.

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

• Minimum investment: ₹1,000.
• Denominations: ₹1,000, ₹5,000, ₹10,000 and ₹50,000.
• Maximum: no upper limit.
• Where to buy: any post office and selected authorised banks.
• Premature encashment lock-in: the certificate can be closed early only after 2 years and 6 months (30 months) from the date of purchase. Before that, early closure is allowed only on the death of the holder or by a court order.

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.

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.

• KVP certificate or post office passbook showing purchase date and maturity value
• PAN card
• Proof of the interest accrued each year (post office maturity table or statement)
• Bank account details for the ITR refund or payment
• Form 26AS and the Annual Information Statement to cross check, though KVP interest usually does not appear there since no TDS is cut

• Assuming KVP saves tax like NSC. KVP has no Section 80C deduction. Claiming one is wrong and can trigger a notice under the Income Tax Act.
• Thinking no TDS means no tax. No TDS only means nothing was withheld. The interest is still fully taxable as income from other sources and you must declare it.
• Forgetting the interest entirely. Because nothing shows in Form 26AS, people skip it. The department can still treat undeclared accrued interest as concealed income.
• Trying to encash before 2 years 6 months. Early closure is not allowed before 30 months except on death or a court order.
• Mixing methods. Switching between accrual and receipt year to year invites scrutiny. Choose one and apply it for the life of the certificate.

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.

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.

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

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.

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.

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.

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.

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.

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

• Upstox, KVP interest rate April to June 2026 (7.5 percent, 115 months, Finance Ministry announcement 30 March 2026): https://upstox.com/news/personal-finance/investing/kisan-vikas-patra-kvp-interest-rate-april-june-2026/article-191475/
• ClearTax, Kisan Vikas Patra 2026 (rate, denominations, no 80C, taxable as income from other sources on accrual, 30 month lock-in): https://cleartax.in/s/kisan-vikas-patra
• Income Tax Department, India: https://www.incometax.gov.in/
• India Post, Post Office Saving Schemes: https://www.indiapost.gov.in/Financial/pages/content/post-office-saving-schemes.aspx
• National Savings Institute, Ministry of Finance: https://www.nsiindia.gov.in/

• Post Office Return Calculator
• AI RTI Drafter
• The RTI Act 2005
• The RTI Playbook