INCOME TAX
Taxability of interest accrued on the Kisan Vikas Patras
Circular No. 687
Dated 19/8/1994
Kisan Vikas Patras were introduced on 1st April, 1988. The Department of Economic Affairs, Ministry of Finance, in its notifications dated 23-03-1988 (see [1988] 172 ITR (St.) 24), 16-12-1991 (see [1992] 194 ITR (St.) 222), 24-04-1992 (see [1992] 198 ITR (St.) 169) and 02-09-1993 (see [1993] 204 ITR (St.) 142) had specified the amount payable on these after 2« years and up to the date of maturity. However, interest and maturity amount during 2« years had not been provided in these notifications.
2. As interest on these Patras has to be assessed to income-tax on accrual basis, the amount of interest accrued on these Patras during initial 2« years has also been determined in consultation with the Department of Economic Affairs. The amount of interest accrued on investment in Kisan Vikas Patras by an assessee is to be calculated on the basis of the following table received from the Department of Economic Affairs wherein rate of interest and maturity amount for Rs. 100 denomination of Kisan Vikas Patras are given :
|
Purchased from date of certificate to date of its encashment |
Purchased from 1-4-1988 to 15-12-1991 |
Purchased from 16-12-1991 to 23-4-1992 |
Purchased from 24-4-1992 to 1-9-1993 |
Purchased from 2-9-1993 |
||||
|
Rate of interest |
Maturity value |
Rate of interest |
Maturity value |
Rate of interest |
Maturity value |
Rate of interest |
Maturity value |
|
|
(Notification dated 23-3-1988) |
(Notification dated 16-12-1991) |
(Notification dated 24-4-1992) |
(Notification dated 2-9-1993) |
|||||
|
(1) 1 Year |
10 |
1,100 |
12 |
1,120 |
12 |
1,120 |
11 |
1,110 |
|
(2) 2 Years |
10 |
1,220 |
12 |
1,260 |
12 |
1,260 |
11 |
1,240 |
|
(3) 2 Years & 6 Months |
10 |
1,280 |
12 |
1,340 |
12 |
1,340 |
11 |
1,310 |
|
(4) 3 Years |
11 |
1,380 |
13 |
1,460 |
13 |
1,460 |
12 |
1,420 |
|
(5) 3 Years & 6 Months |
11 |
1,450 |
13 |
1,550 |
13 |
1,550 |
12 |
1,500 |
|
(6) 4 Years |
12 |
1,590 |
13 |
1,690 |
13.5 |
1,690 |
12.5 |
1,620 |
|
(7) 4 Years & 6 Months |
12 |
1,690 |
13.5 |
1,800 |
13.5 |
1,800 |
12.5 |
1,730 |
|
(8) 5 Years |
13 |
1,880 |
13.75 |
1,940 |
— |
2,000 |
12.75 |
1,860 |
|
(9) 5 Years & 6 Months |
- |
2,000 |
- |
2,100 |
— |
— |
— |
2,000 |
Note.--Maturity values cited are calculated on half-yearly compounding basis based on the rate of interest cited.
(Sd.) Sadhna Pavadia,
Under Secretary to the Government of India.