GPF or General Provident Fund is a type of PPF account that is available only for all the government employees in India. Basically, it allows all the government employees to contribute a certain percentage of their salary to the General Provident Fund. And the total amount that is accumulated throughout the employment term is paid to the employee at the time of retirement.Read more
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Basically, the Provident Fund Options are of three types- General Provident Fund (GPF), Public Provident Fund (PPF), and Employees Provident Fund (EPF). However, the features, the contributions, the terms and conditions, and the accrued benefits of all the three types of provident funds vary.
Interest rates on General Provident Fund are revised time to time as per the government's regulations. Currently, GPF earns an interest rate of 8 percent.
Once you subscribe to General Provident Fund the money needs to be contributed unless there is a case of suspension. Payment to the GPF is usually stopped 3 months prior to the date of retirement as per the government pension rules.
Anyone who fulfills the below-mentioned criteria can contribute to the GPF Account:
|You may also compare: Saral Pension Yojana|
General Provident Fund (GPF) is a good saving instrument for government employees. The employee can contribute a portion of his/her salary regularly till the time he/she is employed. On retirement, the employer transfers the total accumulated amount in the GPF account to the employee.
However, the additional amount that is payable shall not be more than Rs. 60,000. According to the Provident Funds rule the nominee is eligible to avail the benefits only when the subscriber was in service for a minimum of 5 at the time of his/her death.
Check out the below table to understand the difference between the General Provident Fund Scheme and the Public Provident Fund Scheme:
|Factors||General Provident Fund||Public Provident Fund|
|Rate of Interest (for Q1 of FY2019-20)||8 percent||8 percent|
|Eligibility Criteria||Government employees who were hired before January 01, 2004||Any resident of India how is 18 years & above|
|Maturity Period||Maturity amount can be withdrawn after the retirement of the employee||15 years from the date of opening the PPF Account (can be extended in the block of 5 years each)|
|Tax Benefits Under Section 80 C of the IT Act||Tax exemption on the interest earned, contributions, and the returns||Same as General Provident Fund|
|Loan Facility||Anytime while you are a government employee||Loan against PPF is possible only on the 3rd and 6th fiscal years of opening the PPF Account|
In a Nutshell
So, if you are a government employee and want to subscribe to a GPD Account then it is a great tool to help you save for your future financial goals like your child’s education, marriage, house, or even a medical emergency. Hope the above-mentioned guide helps you make the most of your General Provident Fund Account.