7th Pay Commission General Provident Fund: Big news has come for the central employees. The government has made a big change in a rule related to his retirement fund. Let us know the complete information about it.
The government has made a big change in the rules of General Provident Fund. If you or there are any government employees in your house, then you must know these changes. Under the new rules, now the investment limit in GPF has been fixed.
Ceiling fixed at Rs 5 lakh
The central government has put a ceiling on the investment of General Provident Fund (GPF). According to the new rule, now any government employee will be able to deposit only up to Rs 5 lakh in GPF. This limit will be for one financial year. Let us tell you, government sector employees invest in GPF. This is a kind of voluntary scheme, which works like PPF. In this, an interest of 7.1 percent (GPF interest rate) is available on investment.
Till now there was no sealing
According to the Office Memorandum of the Department of Pension and Pensioners’ Welfare (DoPPW), under the GPF (Central Service) Rules 1960, the GPF contribution of the account holder should not be less than 6 percent of the total salary. Till now there was no limit for putting money in GPF. Employees could deposit a percentage of their salary in it. But the government has now imposed a maximum limit of Rs 5 lakh in a financial year.
GPF for government employees like PPF
Explain that like PPF, government employees can deposit a fixed part of their salary in the General Provident Fund. This money is returned to the account holder at the time of retirement. Interest is earned on the money deposited in GPF. It is managed under the Department of Pensioners Welfare, Ministry of Personnel, Public Grievances and Pensions.
What is GPF?
General Provident Fund (GPF) account is only for government employees. It is a type of retirement fund scheme. Government employees can contribute up to 15 percent of their salary to the GPF account. The ‘Advance’ feature of this account is the most special. In this, the employee can withdraw the fixed amount from the GPF account if needed and can deposit it later.
There is no tax on this. The government has fixed the interest rate of GPF at 7.1 percent. Interest is calculated on quarterly basis. The government does not make any contribution to GPF on its behalf, only the employee’s contribution is there.
