April 26, 2023

GPF Rules (General Provident Fund Deposit) 2023 - Withdrawal & Nomination

GPF rules

Retirement planning constitutes an integral part of financial planning. Planning for retirement does not only ensure that your funds get sorted post-retirement but also ensures you fulfill your dreams, such as travelling around the world.
Though the government of India backs several schemes, Public Provident Fund (PPF), General Provident Fund(GPF) and Employees' Provident Fund(EPF) are the widely known ones.
Today, we are going to focus on the General Provident Fund and its various rules you must know before subscribing to the scheme.
In this blog, we will cover the following:
  • What is a GPF?
  • Eligibility rule for GPF
  • Nomination rule for GPF
  • Deposit rule for GPF
  • GPF interest rules
  • GPF rules for withdrawals
  • GPF advance rules
  • GPF taxation rules

What is a General Provident Fund?

A General Provident Fund(GPF) is a fund specifically designed to plan for retirement for government employees.
Like all other schemes or funds, a certain sum amount or percentage of salary is deducted and contributed towards the fund. Post-retirement, the accumulated funds are reimbursed to retired employees.

What are GPF rules?

The government of India has enforced specific rules regarding the various aspects of the saving scheme to make sure everything is clear. Let's learn about the various rules of the scheme.

Eligibility criteria for GPF

Generally, only government employees are eligible for the scheme. However, anyone who fulfils the below-mentioned criteria(s) is eligible to contribute towards the fund.
  • All temporary government employees who have performed their service for a year or more.
  • All permanent government employees who are residents of India
  • All re-employed pensioners (other than those eligible for admission to the Contributory Provident Fund)
Not eligible: Private sector employees are not eligible to contribute towards the scheme. They can opt for PPF schemes instead.

Nomination rule

Subscribers to the fund can declare a nominee at the time of subscribing to the fund. The nomination rule elaborates that the nominee should be a subscriber's family member.
In case of more than one nominee, subscribers shall specify the share payable to each nominee.

GPF rules: Deposits

In GPF, there are certain rules for how a subscriber can make deposits towards the fund. Let's have a look at them.
Minimum amount: Subscribers to the fund need to contribute at least 6% of their total income.
Maximum amount: Subscribers to the fund are not allowed to contribute any amount exceeding their total income.
Frequency of contribution: Monthly contributions need to be made except during the period an employee is under suspension.

GPF interest rate rules

GPF interest rules cover the interest aspect of the saving scheme. The government of India fixes the interest on amounts credited (or GPF balance). The government sets an interest rate for every quarter.
For the quarter from 01 January 2023 to 31 March 2023, the interest rate was 7.1% per annum.

GPF withdrawals rules

GPF rules for withdrawal are different under different circumstances. Let's have a look at each one of them.

Primary criteria

As per GPF rules, individuals wanting to withdraw their funds must have completed at least ten years of service in their field.
  • For education, marriage, or to fund dependents/family members' needs, you can withdraw up to 75% of the outstanding balance in the PF account
  • In case of medical crises for yourself or your family members, subscribers can withdraw up to 90% of their PF account balance. The amount will be made available within seven days.
  • If you want to finance a house, purchase land to construct a house, renovate your home, reconstruct ancestral property, or repay a home loan, you can withdraw up to 75% of the balance in the PF account.
  • You can also withdraw funds if you wish to buy a vehicle, repair it or repay a car loan. If you are planning to specifically buy a vehicle, the maximum you can withdraw is either three-fourths of the vehicle value or 75% of the PF balance, whichever is lower.
  • You can also withdraw funds to buy home appliances such as air conditioners and washing machines. The only condition is you have to use funds for the purpose you mentioned and not otherwise.
  • Without giving any solid reason, you can withdraw up to 90% of your funds or the balance amount before two years of retirement.
  • If the subscriber dies, the nominee is eligible to redeem the outstanding amount in the PF account. If the subscriber to the fund has been performing his service for at least five years, the nominee is eligible for an additional amount as well. This amount can be calculated as the average of 3 years of PF balance preceding the event of death. The amount must not exceed ₹60,000.
  • The subscriber is eligible for 100% of the PF balance at retirement or superannuation.

GPF advance rules

GPF subscribers are eligible to get three months of advance pay or half of the PF account balance, whichever is lower.
Subscribers are eligible for advance for various purposes such as funding education, marriage, medical emergencies, buying ACs, and washing machines, and fulfilling the expenses of legal proceedings against you or members.
The advance needs to be paid back within 12 - 24 months in equal installments. The loan tenure can be up to 36 months if the advance payment exceeds three months' pay.

GPF taxation rules

Many government employees prefer saving their funds towards GPF because of the tax benefits. Monthly contributions, accrued interest and returns from the PF account are exempted from taxation under the Section 80C.

Conclusion

Planning for retirement is crucial and should be addressed at any cost. The general provident fund allows salaried individuals across various government sectors to prepare for their retirement.
In this blog, we talked about eligibility rules, nomination rules, deposit rules, interest rules, GPF rules for withdrawals, advance rules and taxation rules.
Being a government employee, you should be aware of these rules so that you don't break them unintentionally.

Never miss a trading opportunity with Margin Trading Facility

Enjoy 2X leverage on over 900+ stocks

Upstox Margin Trading Facility
Apple Logo
Downloadlogo
iOS App
Google Play Logo
Downloadlogo
Android App

RELATED ARTICLES

Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PMJAY) 2023

The Ayushman Bharat Campaign was launched by the government with the intention of improving healthcare in the country and providing primary health to its citizens. Two schemes are covered under this campaign. One of them is Pradhan Mantri Jan Arogya Yojana. Pradhan Mantri Jan Arogya Yojana was a scheme that was launched under the Ayushman Bharat in the year 2018 in the district of Ranchi by Shri Narender Modiji, the PM of India. The scheme was formerly known as the National Health Protection Mission. The scheme provides a cover of INR 5 Lakh for every family for a year for hospitalization of tertiary and secondary treatments across private and public hospitals in India to greater than 10.75 crores of families across India. These families form the lower 40% of the population of India. The Government gives the full expense of the scheme, and the cost is jointly shared by State and Central Governments.

DBT (Direct Benefit Transfer) 2023 - Agriculture, Full Form, Login & Portal

On January 1st, 2013, Direct Benefit Transfer (DBT) went into effect with the main objective of improving the Government's delivery system and redesigning the current welfare program approach by accelerating, securing, and lowering the amount of fraud. The Planning Commission first established the DBT Mission as the main hub for carrying out DBT initiatives. But from July 2013 to September 14th, 2015, the Department of Expenditure took over the DBT mission. On September 14th, 2015, the Coordination & PG Secretary shifted responsibility for the DBT Mission's affairs to the Cabinet Secretariat. The Government has established 450 programs and served over 900 million individuals since the direct benefit transfer (DBT) scheme's commencement.

Kanya Sumangala Yojana 2023: Login & Online Registrations

The Kanya Sumangala Yojana is a landmark initiative of the Hon'ble Chief Minister of UP to bring about a positive change in the lives of the girl child in UP. The scheme aims to improve the male-female sex ratio that fell since the girl child was killed at birth, and if they did survive, they did not get any education as the male child did. It is important to note that there are specific guidelines to avail of the financial benefits under the Kanya Sumangala Yojana. Families with two girl children or three where there are twins are only eligible for this scheme. Only girl children born on or after 1st April 2019 are eligible for full assistance. There are six stages at which assistance is given to the girl child, and each stage has certain documentation and deadlines to be followed. All documents should be admitted within the given deadline to avail of the benefit at all stages to qualify for the Mukhyamantri Kanya Sumangala Yojana Scheme. The State Government of Uttar Pradesh launched the Mukhyamantri Kanya Sumangala Yojana Scheme in Lucknow on 25th October 2019. This social welfare scheme aimed to provide a better quality of life for the girl child in UP state. This benefit is limited to two girl children per family. Monetary assistance under the Kanya Sumangala Yojana scheme is given to the parents or guardians of the children, and they are expected to take care of the child's education and health. The scheme applies only to BPL or Below Poverty Line families. Only permanent residents of the state of UP are eligible for this scheme. The monetary assistance under the Kanya Sumangala Yojana is paid out to the family of the girl child in six installments. The goals of the Mukhyamantri Kanya Sumangala Yojana Scheme are as under: - Proving timely financial assistance to the girl child at each stage of their education - Create a greater balance in the sex-ratio - Elimination of female foeticide - Spread positive thinking towards the girl child

Loan Against PPF Account and How to Take: Interest Rate and Calculation

Availing of a loan can be a hectic process, especially if you take one for the first time, are self-employed, or have a bad credit score. However, there are ways to navigate this as well, and one such option is a loan against PPF. You must have heard about PPF, the Public Provident Fund, a fixed-income investment scheme offered by the central government for the citizens of India. If you have been investing in this scheme, then you can avail loan against your investment in the PPF account. Let's understand how this works in detail. The article will cover the following topics: - What is a PPF account? - What is a loan against PPF? - Key features of loan against PPF - Benefits of loan against PPF - Risks involved in availing of loan against PPF - Conclusion