GPF Rules

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What is a General Provident Fund (GPF)?

GPF Rules – The General Provident Fund (GPF) is a retirement savings scheme available to government employees in India. It allows employees to contribute a portion of their salary to a savings fund, which they can withdraw upon retirement or under specific conditions. The scheme provides financial security and encourages disciplined savings throughout an employee’s service.

Key GPF Rules

1. Eligibility Rules

Only government employees (both central and state) appointed before January 1, 2004, qualify for eligibility.
The National Pension System (NPS) covers employees who joined on or after this date.
Employees must complete at least one year of continuous service to subscribe to GPF.

2. Deposit Rules

Employees must contribute a minimum of 6% of their basic salary to the GPF.
The maximum contribution cannot exceed 100% of the employee’s salary.
The employer automatically deducts contributions from the employee’s salary every month.
Employees can make additional voluntary contributions, following the limits set by the government.

3. GPF Interest Rate Rules

The government determines and revises the interest rate on GPF deposits quarterly.
Interest is calculated monthly but credited to the account at the end of the financial year.
The interest rate is usually higher than bank fixed deposit rates, making GPF an attractive savings option.

4. Nomination Rules

Employees must nominate one or more family members to receive the accumulated funds in case of death.
If there is no family member, a nominee can be any person of the employee’s choice.
Employees can change or modify their nominations at any time during their service.

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5. GPF Withdrawal Rules

Employees can withdraw from their GPF account under the following conditions:
- Retirement or superannuation.
- Resignation from service.
- Death of the employee (nominee or legal heir receives the funds).
- Specific financial needs such as education, marriage, medical treatment, or purchase of property.
Partial withdrawals (advances) are allowed after 15 years of service but are subject to conditions.

6. GPF Loan Rules

Employees can avail of a non-refundable advance from their GPF for urgent financial needs.
No interest is charged on the advance amount, and it must be repaid in fixed installments.
Loan amounts are subject to eligibility criteria based on the employee’s service tenure and total balance.

7. GPF Maturity and Settlement Rules

Upon retirement, the employee receives the entire accumulated amount, including interest.
If the employee passes away, the nominee or legal heir receives the balance amount.
The authorities typically process the settlement within three months from the date of retirement or death.

8. Taxation Rules

Contributions to GPF are eligible for tax deductions under Section 80C of the Income Tax Act.
Interest earned on GPF is tax-free.
The final corpus received at the time of retirement is completely tax-exempt.

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Comparison with Other Provident Funds

GPF vs. Public Provident Fund (PPF)

Feature	GPF	PPF
Eligibility	Government Employees	Any Indian Citizen
Interest Rate	Higher than PPF	Lower than GPF
Tenure	Till retirement	15 years (extendable)
Withdrawals	Allowed under conditions	Limited partial withdrawals
Tax Benefits	Fully exempt	Fully exempt

GPF vs. Employees’ Provident Fund (EPF)

Feature	GPF	PPF
Eligibility	Government Employees	Private & Public Sector Employees
Contribution	A fixed percentage of salary	A fixed percentage of salary
Interest Rate	Fixed by Government	Set by EPFO
Withdrawals	Allowed under conditions	Allowed with restrictions
Tax Benefits	Fully exempt	Partially taxable in certain cases

How to Withdraw from GPF?

Step-by-Step Process

Submit a withdrawal application to the employer or concerned authority.
Provide supporting documents (if applicable, e.g., medical bills, property papers, etc.).
The request is reviewed and approved by the relevant department.
The withdrawal amount is processed and credited to the employee’s bank account.

Conclusion

This comprehensive guide to GPF rules helps government employees understand their rights, benefits, and procedures related to the General Provident Fund. If you need further clarification, consult your department’s financial office or visit the official GPF portal.

Frequently Asked Questions

Who can open a GPF account?

Only government employees who joined service before January 1, 2004, can open a GPF account.

What is the minimum and maximum contribution to GPF?

Employees must contribute at least 6% of their salary, but they can contribute up to 100% of their salary.

Can I withdraw my GPF before retirement?

Yes, partial withdrawals are allowed under specific conditions like education, marriage, or medical expenses.

What is the current interest rate on GPF?

The interest rate is revised quarterly by the government. Employees should check official notifications for updates.

Is GPF tax-free?

Yes, contributions, interest earned, and withdrawals from GPF are completely tax-free.

Can I take a loan against my GPF balance?

Yes, employees can take an advance from their GPF, which must be repaid in fixed installments.

How long does it take to process GPF withdrawals?

GPF withdrawals usually take 3 months for processing after retirement or resignation.

Can I continue contributing to GPF after retirement?

No, contributions to GPF stop after retirement, and the accumulated balance is paid out.

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