Everything You Need to Know about GPF Information for the Financial Year 2021-22
The General Provident Fund (GPF) is a government-backed account scheme that allows individuals to save money for retirement. This scheme is available for all Central and State government employees, and it is mandatory for them to subscribe to it. As the financial year 2021-22 is approaching, every employee under this scheme must be aware of the rules and regulations and revised interest rates applicable to GPF. In this article, we will cover everything you need to know about GPF information for the financial year 2021-22.
What is GPF?
GPF is a scheme that provides government employees with a secure opportunity to save money for their retirement or unforeseen emergencies. The contributions made under GPF are tax deductible under Section 80C of the Income Tax Act. GPF contributions are made by both the employee and the employer. An employee contributes 10% of their basic salary and dearness allowance, while the employer contributes an equal amount.
GPF Interest Rates
The GPF interest rates are reviewed and revised every quarter of the fiscal year. For the financial year 2021-22, the Ministry of Finance has announced that GPF interest rates will remain unchanged at 7.1%. The interest is calculated monthly and added to the GPF account balance at the end of the year.
GPF Withdrawals and Loans
GPF accounts allow individuals to withdraw funds for several purposes, including education, medical emergencies, and constructing a new home. An employee can withdraw up to 50% of their GPF account balance after completing 10 years of service. However, loans are not permitted under the GPF scheme.
GPF Nomination
Nomination is a crucial element of the GPF scheme. It enables individuals to name a nominee in case they pass away before receiving the GPF balance. Employees must update their GPF nomination form every time they have a new family member or change their nominee.
GPF Account Transfer
When a government employee transfers from one department to another or switches jobs from one state to another, their GPF account must be transferred to the new account under the same scheme. A government employee can transfer their GPF account to another person under specific circumstances, such as retirement or death, with the permission of the head of the department.
Conclusion
The GPF scheme is an essential savings mechanism for government employees that secure their future and provides them with financial support when needed. Therefore, it is essential for every government employee to be well informed about the rules and regulations surrounding GPF accounts. As the financial year of 2021-22 approaches, it is crucial to know that the interest rate remains unchanged at 7.1%, and the scheme is an excellent opportunity to save for retirement.
