Business   

No exemption for income from KVPs

Kisan Vikas Patras for tax purpose are not different from Indra Vikas Patras or any such investments. Though income is given annually, it should be open to the assessee in the light of the view taken by the Income-tax Department generally for National Savings Certificates and fixed deposits that annual accretion could be treated as the income of the year annually. If, however, the assessee adopts cash basis, he can offer the entire income in the year of encashment. The argument that the entire surplus can be taxed only as capital gains, though tenable, does not have official acceptance.

There is no tax benefit for investment in KVPs under Sec. 80C either for contribution towards principal for interest as are available for National Savings Certificates, since Board’s instruction covers only NSCs. KVPs were apparently meant for agriculturist, who might not have taxable income. That is probably the reason the tax aspect of this class of investments is not as much publicised like the other different schemes of the Government.

Printer friendly page  
Send this article to Friends by E-Mail

Stories in this Section

Banks jostle for a bigger market share
Bridging the deficit in infrastructure
Utilitarian Instant Messenger bots
Defects in form 15G and 15H
No exemption for income from KVPs

Copyright © 2008, The Hindu. Republication or redissemination of the contents of this screen are expressly prohibited without the written consent of The Hindu