Taxability of interest accrued on the Kisan Vikas Patras - Income Tax - 687/1994

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.