GPF (General Provident Fund) is a retirement savings scheme for government employees. It’s a long-term investment plan that helps employees save money and earn interest until they retire. In this blog post, we will discuss ten things you need to know about GPF information.
1. Eligibility criteria for GPF
To avail of the GPF scheme, an employee should be a permanent government employee. If you’re a contractual employee, your employer can opt to enroll you in the scheme.
2. Contribution to GPF
The contribution to the GPF account is mandatory for government employees. The employee must contribute between 6% and 10% of their salary, and the employer contributes a matching amount.
3. Tax benefits of the GPF scheme
Contributions made towards the GPF account are tax-deductible under Section 80C of the Income Tax Act. Moreover, the interest earned is tax-free, making GPF a lucrative savings option.
4. Loan facility
The GPF scheme also provides a loan facility to its subscribers. They can take a loan from their accumulated balance and repay it with interest over a certain period.
5. Withdrawal rules
The GPF scheme allows withdrawals for specific purposes, like medical emergencies, higher education, or weddings. A subscriber must have completed a certain number of years in service to be eligible for such withdrawals.
6. Nomination facility
The scheme offers a nomination facility to its subscribers. It enables them to nominate an individual who’s entitled to receive the accumulated amount in case of the subscriber’s demise.
7. GPF interest rate
The GPF interest rates are set by the government and are subject to change. As of 2021, the interest rate is 7.1% per annum.
8. Account transfer and portability
GPF subscribers can transfer their account balance to their new employer. They can also opt for portability and transfer their account to a non-governmental employee provident fund.
9. GPF account statement
The government provides a GPF account statement to subscribers every year. This statement contains information regarding their contribution, interest earned, and balance in their account.
10. Role of centralized accounting
The Centralized Accounting Unit (CAU) ensures that the contributions made by the subscribers are accounted for and deposited into their accounts timely. CAUs also maintain records, prepare statements, and perform other accounting functions.
Conclusion
GPF information is essential for government employees as it’s a savings plan that helps them secure their financial future. The scheme offers numerous benefits such as tax savings, loan facilities, and account portability. It’s crucial to understand the ten things mentioned above to make informed investment decisions and utilize the scheme’s benefits entirely.
