What is General Provident Fund (GPF)?

About General Provident Fund (GPF):

• GPF is a kind of Public Provident Fund (PPF) account that is available only for government employees in India.
• It allows them to allocate a portion of their salaries to their GPF accounts.
• Upon retirement, employees receive the accumulated corpus from their GPF accounts, reflecting their service tenure contributions.
• As per the GPF rules, the following are eligible to subscribe to GPF account:
  • All temporary government servants who have given their service for continuously one year
  • All re-employed pensioners (except those eligible for admission to the contributory provident fund)
  • All permanent government servants
• Contribution:
  • It is a mandatory scheme for government employees, requiring them to contribute a certain percentage of their salary towards the fund. 
  • The contributions are deducted from the employee's monthly salary, and the amount earns interest at a predetermined rate.
  • Employees can also increase their GPF deductions as per their choice.
• Withdrawal:
  • Employees can withdraw their savings from the fund upon retirement or resignation from service.
  • A GPF is flexible, allowing employees to withdraw money from the fund forvarious reasons, such as marriage, education, and medical emergencies.
  • Employees can also take out loans against their GPF account, subject to certain conditions.
  • Employees who transfer to another government department or leave their job can withdraw their GPF balance or transfer it to their new employer.
  • The GPF sum will be paid to their nominee if the employee passes away.
• GPF also offers a competitive interest rate, revised quarterly.
• The GPF scheme is administered by the Department of Pension and Pensioners’ Welfare, falling under the Ministry of Personnel, Public Grievances and Pensions.

This scheme offers several benefits to government employees, including tax savings, low-risk investments, and guaranteed returns.

Q1: What is Employees’ Provident Funds Scheme, 1952 (EPF)?

Employees Provident Fund Scheme (EPFS) is a long-term retirement saving scheme available to all salaried employees in India. It is managed by Employees provident fund organization (EPFO) and it is covered under the Employees’ Provident Funds and Miscellaneous Provisions Act, 1952. Under EPF Scheme, an employee and employer have to pay a certain percentage of equal contribution in the provident fund account and on retirement, an employee gets a lump sum amount of contribution made by employer and employee with interest on both.

Source: Deductions Made Under GPF Scheme Do Not Automatically Entitle Employees To Pension Benefits : Madras High Court