"Great things never come from comfort zone"           "Wealthy people invest first and spend what’s left and broke people spend first and invest what’s left"           "Investment is an asset or item that is purchased with the hope that it will generate income or appreciate in the future"           "The secret to getting ahead is getting started.................Start using your Savings to Earn Money"           "The best gift, and investment, you can give your child is your time"           "Investing in your child’s education is never a wasted effort"           "Making money and handling money are both different things"



General Provident Fund

General Provident Fund (GPF) is a provident fund account which is available for government employee’s (i.e. central government employees, railways and defence forces), Semi Govt. bodies, Universities or local authorities etc. The employee should be “Resident of India”. This is mandatory for a certain salary class employed with the government. Employees working with private companies are not eligible for the account.
The Government has raised interest rate on General Provident Fund (GPF) and other related schemes in 3rd quarter of 2018 by 0.4 per cent to 8 per cent (earlier it was 7.6%). Few days before the government has also increased rate of interest on small savings schemes for 3rd quarter 2018 by 0.3 percent to 0.4.

A government employee can become a member of the fund by contributing a certain percentage of their salary to the GPF.

Interest Rate-
The Government has raised interest rate on General Provident Fund (GPF) and other related schemes in third quarter of 2018 by 0.4 per cent to 8 per cent (earlier it was 7.6%). The revised rates would be applicable from October 1, 2018 to December 31, 2018,
Tax Exemption-
  • The contributions made by the employee can be claimed as tax deductions under section 80C.
  • The contributions made by the employer are exempted from income taxes in the year in which contributions are made.
  • Interest amount credited during the financial year is not treated as income and hence it is exempted from income tax.
  • The redemption amount at the time of retirement is exempted from tax.
  • If an employee terminates the PF account, the withdrawal amount too is exempted from taxes. Same is the case with resignation.
Loan Facility-

GPF advance has feature, which provides an interest free loan from the general provident fund savings. The amount borrowed should be paid back in regular monthly instalments. No interest will be paid on the GPF cash advance taken.

Withdrawal facility-

Employees can withdraw GPF for select purposes after completing 10 years of service (earlier it was 15 years of service). The money can be withdrawn for purpose of education (which includes primary, secondary and higher education), marriage of self and family members, in emergencies such as illness, buying property, cars and servicing bank loans etc. There are such rules as under-

  • Government has permitted GPF withdrawal of up to twelve months pay or three-fourth (75 per cent) of the outstanding money in the General Provident Fund, whichever is less.
  • In some cases, such as for illness, the withdrawal may be allowed up to 90 per cent of the amount standing at credit of the subscriber.
  • The employees can soon withdraw their money and receive payments within 15 days while in case of emergencies such as illness of employee or his or her family member the money from the GPF can be withdrawn within seven days.
  • An employee can withdraw 90 per cent of the money without giving any reason from their provident fund accounts two years before retirement from the job. (earlier it was one year before their retirement).

The accumulations in the fund is paid to the government employee at the time of superannuation or retirement.


The account holder can nominate a nominee at the time of opening the account. The nominee will receive the benefits from the account if anything should happen to the account holder.


The subscriber on a self-declaration write to your head of department, no any documentary proof in support of your request to withdraw from GPF is required. In all cases of withdrawal from the fund, you just need to get it sanctioned by your head of department.



Leave a Reply

Name *
Comments *

© 2024 - EnSkyAR Financial Services