In a move that firms the view that the government wants to curtail its expenses,
- Interest rate on PPF has been cut from 8.7% to 8.1%.
- Interest from Kisan Vikas Patra has also been cut, from 8.7% to 7.8%.
Here are some important facts about PPF and KVP –
- PPF is eligible for deduction under section 80C
- Kisan Vikas Patra is not eligible for deduction under section 80C
- Interest income from PPF is exempt from tax
- Interest income from KVP is taxable
- Interest on PPF as well as KVP is compounded annually.
Here are some other revisions announced –
The government also done a rate cut on other small saving schemes such as
On 1-year time deposit to 7.1% from 8.4%
On 2-year time deposit to 7.2% from 8.4%
On 3-year time deposit to 7.4% from 8.4%
On 5-year time deposit to 7.9% from 8.5%
On 5-year National Saving Certificates to 8.1%
On 5-year Senior Citizen Scheme to 8.6% from 9.3%
On Girl Child Scheme to 8.6% from 9.2%
On 5-year recurring deposit to 7.4% from 8.4%