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What is General Provident Fund? Know the GPS Account Features and Benefits
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What is the General Provident Fund (GPF)?

The Indian Government offers different types of saving schemes for government employees so they can generate high returns. Public provident fund (PPF), Employees provident fund (EPF), and General provident fund (GPF) are the three types of provident funds available in India. Therefore, it is necessary to evaluate the differences between them that will help gain more ideas. Another factor is that it makes feasible ways to select the right one based on the choices. This will help a lot to focus more on the future financial goals that give ways to meet exact needs. 

What is the General Provident Fund (GPF)? 

General Provident Fund is a type of account meant for government employees to contribute a certain percentage of their salary to the fund. An employee will get the total amount after his/her retirement. Those who work in central and state government offices come under a GPF scheme that caters to their requirements. However, they should know the scheme’s complete details, including features and benefits. 

What are the key features of the GPF?

  1. Nomination: A subscriber can nominate a family member at the time of joining the fund. This will help a lot to obtain the accumulated amount from the fund in the event of the subscriber’s demise.
  2.  Payment: Subscribers will get the contribution amount after their retirement, and they don’t need any application form for this process.
  3. Death Benefit: As per the GPF rules, a nominee will receive the death benefit in case of the death of the subscriber. However, it is subject to specific terms and conditions, and a subscriber is in service for at least 5 years at the time of his/her death. The additional amount payable shouldn’t exceed Rs.60000 under the GPF scheme.
  4. Management: The Department of Pension and Pensioner’s welfare department will manage the GPF scheme. This will help subscribers gather more information about the benefits and other things in detail.
  5. Advances: GPF offers advances for subscribers, and they can use them for various purposes such as marriage, education, treatment for illnesses, legal expenses, etc. At the same time, it is wise to check the terms and conditions in detail before making advances.
  6. Withdrawals: The Government of India allows employees to withdraw the amount from the GPF when they complete 15 years of service. The maximum amount permitted to withdraw is 6 months’ pay or half balance in the account.
  7. Tax deductions: Employees who earn a taxable income of Rs.6.5 lakhs can avail of a ‘tax rebate’ under income tax sections. But, at the same time, they should invest Rs.1.5 lakhs in specified investments to get the benefit.
  8. Contribution: A subscriber can contribute towards the GPF account except during the suspension period, and the subscriptions will be stopped 3 months before retirement.

 

Maturity and withdrawal process of GPF 

Subscribers should understand the maturity and withdrawal process of GPF in detail that will help accomplish goals to a large extent. An employee can withdraw his/her accumulated GPF funds on various grounds. However, the only mandatory condition is that he/she should have completed 10 years of service. When employees quit the job at any stage, they are eligible to withdraw their GPF balance irrespective of the service tenure. It is essential to know the general provident fund rules for withdrawal from various sources.

General Provident Fund-Eligibility Criteria 

Anyone who is a resident of India and working in government sectors is eligible to open a GPF account. However, the scheme is not suitable for private sector company employees. 

How to calculate the GPF interest rates?

Subscribers should calculate the GPF interest rates with an online tool that will help them proceed further. For example, a GPF calculator allows employees to determine the total receivable amount after retirement. At the same time, a subscriber has to enter some essential details to arrive at the exact figure. Some of them include name, designation, GPF account number, opening balance of GPF at the beginning of each year, financial year, monthly subscription, etc. A GPF interest calculation worksheet is available for subscribers, and they can calculate the interest rates accordingly. 

At present, GPF fetches an interest rate of 8%, and it may vary in a financial year. Therefore, it is wise to know the updates of GPF interest rates properly that will help a lot to withdraw the amount during emergencies. 

What is the deposit limit of GPF?

A subscriber should know the deposit limit of GPF before joining the scheme. The minimum deposit limit is 6% of the employee’s salary, and the maximum deposit limit is 100%. Subscribers should know how to apply for the GPF scheme from concerned authorities. 

How to open a GPF account?

One has to fill an appropriate form and submit the same to the Account General of respective states. The account general will assign an account to subscribers after verifying the details. Also, it will prescribe a monthly deduction from the employee’s monthly salary to the Drawing and Disbursing Officer (DDO). A subscriber will receive complete information about the account at the end of each financial year. Those willing to open an account online should follow the instructions properly to avoid unwanted problems.

How to get a GPF slip online?

Subscribers should know how to get GPF slip online after joining an account. First, they should visit the official website of the accountant general where they can find a portal. Then, one must enter his/her GPF series number in capital letters. The second step is that they should enter their account number correctly to proceed further. Then, a subscriber should enter his/her password that will help gather the details as soon as possible. Finally, they must enter the date of birth in the provided column till getting further instructions. While applying for GPF, it is necessary to know the rules and regulations in detail.

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