<<–2/”>a href=”https://exam.pscnotes.com/5653-2/”>h2>General Provident Fund (GPF)
What is GPF?
The General Provident Fund (GPF) is a retirement Savings scheme offered to government employees in India. It is a voluntary scheme where employees contribute a portion of their salary to the fund, which earns interest and is paid out to them upon retirement or resignation.
Eligibility for GPF
- Government Employees: All central government employees, including those working in Public Sector Undertakings (PSUs) and autonomous bodies, are eligible to join the GPF scheme.
- State Government Employees: Some state governments also offer similar schemes for their employees.
Contribution to GPF
- Employee Contribution: Employees can contribute a minimum of 6% and a maximum of 10% of their basic pay to the GPF.
- Government Contribution: The government does not contribute to the GPF.
- Contribution Limits: The maximum amount that can be contributed to the GPF in a financial year is capped at â¹1.5 lakh.
Interest Rates on GPF
- Interest Rate: The interest rate on GPF is determined by the government every quarter and is usually higher than the interest rates offered on other savings schemes.
- Current Interest Rate: The current interest rate on GPF is 7.1% per annum.
Benefits of GPF
- Tax Benefits: Contributions to the GPF are eligible for tax deductions under Section 80C of the Income tax Act.
- Interest Income: Interest earned on GPF is also tax-free up to a certain limit.
- Retirement Savings: GPF provides a secure and tax-efficient way to save for retirement.
- Loan Facility: Employees can avail loans against their GPF balance for various purposes like house construction, marriage, Education, etc.
- Withdrawal Facility: Employees can withdraw their GPF balance upon retirement, resignation, or for specific reasons like medical emergencies.
How to Open a GPF Account
- Application: Employees need to submit an application form to their respective department’s Accounts Officer.
- KYC Documents: They need to provide KYC documents like proof of identity, address, and bank account details.
- Contribution: Once the account is opened, employees can start contributing to the GPF through their salary.
GPF Withdrawal Rules
- Retirement: Upon retirement, employees can withdraw their entire GPF balance.
- Resignation: Employees can withdraw their GPF balance upon resignation, subject to certain conditions.
- Other Reasons: Employees can also withdraw their GPF balance for specific reasons like medical emergencies, house construction, marriage, etc., subject to certain conditions.
GPF Loan Facility
- Loan Eligibility: Employees can avail loans against their GPF balance.
- Loan Purpose: Loans can be availed for various purposes like house construction, marriage, education, etc.
- Loan Interest Rate: The interest rate on GPF loans is usually lower than the market rate.
- Loan Repayment: Loans need to be repaid within a specified period, along with interest.
GPF Account Statement
- Account Statement: Employees can access their GPF account statement online or through their department’s Accounts Officer.
- Statement Details: The account statement shows the balance, contributions, interest earned, and withdrawals made.
Table 1: GPF Contribution Limits
| Financial Year | Maximum Contribution Limit (â¹) |
|---|---|
| 2023-24 | 1,50,000 |
| 2022-23 | 1,50,000 |
| 2021-22 | 1,50,000 |
Table 2: GPF Interest Rates
| Quarter | Interest Rate (%) |
|---|---|
| April-June 2023 | 7.1 |
| July-September 2023 | 7.1 |
| October-December 2023 | 7.1 |
| January-March 2024 | 7.1 |
Frequently Asked Questions (FAQs)
Q1: What is the minimum contribution to GPF?
A: The minimum contribution to GPF is 6% of your basic pay.
Q2: Is there any tax benefit on GPF contributions?
A: Yes, contributions to GPF are eligible for tax deductions under Section 80C of the Income Tax Act.
Q3: What is the interest rate on GPF?
A: The current interest rate on GPF is 7.1% per annum.
Q4: Can I withdraw my GPF balance before retirement?
A: Yes, you can withdraw your GPF balance before retirement for specific reasons like medical emergencies, house construction, marriage, etc., subject to certain conditions.
Q5: Can I avail a loan against my GPF balance?
A: Yes, you can avail loans against your GPF balance for various purposes like house construction, marriage, education, etc.
Q6: How can I access my GPF account statement?
A: You can access your GPF account statement online or through your department’s Accounts Officer.
Q7: Who is eligible for GPF?
A: All central government employees, including those working in public sector undertakings (PSUs) and autonomous bodies, are eligible to join the GPF scheme.
Q8: What is the maximum contribution limit to GPF?
A: The maximum amount that can be contributed to the GPF in a financial year is capped at â¹1.5 lakh.
Q9: What is the difference between GPF and NPS?
A: GPF is a government-run scheme for government employees, while NPS is a voluntary scheme open to all citizens. NPS offers more Investment Options and flexibility, while GPF provides guaranteed returns and tax benefits.
Q10: How do I calculate my GPF maturity amount?
A: The maturity amount of your GPF account is calculated based on your contributions, interest earned, and the number of years you have contributed to the fund. You can use an online GPF calculator to estimate your maturity amount.