PDA

View Full Version : TDS on maturity for KVP



sunny23m
09-04-2013, 01:56 AM
I had invested in KVP (kisan vikas patra) around 2004 and they are soon going to mature.

I am an NRI right now and wondering where can I deposit the maturity amount.
Ideally I would like to invest the money to buy an apartment.

Do I have to open a NRO account to deposit this? Will the bank deduct TDS and on the whole amount?

Rahul
09-04-2013, 05:08 PM
Bank won't deduct any TDS on KVP amount. KVP money cannot be repatriated and hence will be required to be deposited in an NRO account. If you don't have the NRO account but have had an savings account than, your existing savings account will be required to be converted into an NRO account, further to which you can deposit the funds in the account.

sunny23m
10-04-2013, 01:37 AM
Oh cool. Thank you.
Then i can just open a NRO account and deposit money in there.

Just curious, how come there is no tax on the interest earned on KVP?


Bank won't deduct any TDS on KVP amount. KVP money cannot be repatriated and hence will be required to be deposited in an NRO account. If you don't have the NRO account but have had an savings account than, your existing savings account will be required to be converted into an NRO account, further to which you can deposit the funds in the account.

sunny23m
10-04-2013, 02:02 AM
Nevermind, found the answer. Tax is payable on the interest earned however no TDS.


Oh cool. Thank you.
Then i can just open a NRO account and deposit money in there.

Just curious, how come there is no tax on the interest earned on KVP?

PolicyWala
10-04-2013, 02:02 AM
The interest earned on KVP is taxable in the same manner as interest income earned on bank FD. The KVP holder is not required to pay TDS (tax deducted at source) unlike a bank FD where interest income of Rs 10,000 or more attracts TDS.

Shrikant_Inturi
11-04-2013, 02:41 AM
What is the difference between NRE and NRO accounts?

Rahul
11-04-2013, 02:18 PM
What is the difference between NRE and NRO accounts?

- NRE Account credits are funds deposited from out of India in permitted foreign currencies.
- NRO Account permits credit of any legitimate dues in India of the account holder.