The Indian Government makes frequent improvisations to make things tranquil for you. There are several consolations made to make your life easier. GPF or, in other words, a small piggy bank for future use. About 50 lakh government employees get benefitted from this. There are many liberalizations made to make things facile.
A Provident fund is another Pension fund or a piggy bank. It aims at providing a lump sum during your final exit from the service.
The Provident Funds are generally of three types-
- General Provident Fund
- Public Provident Fund
- Employees Provident Fund
In this article, we’re going to discuss GPF Withdrawal Rules, Options, And Guidelines. There are several norms and guidelines to take into account its avail.
What Is GPF?
GPF or is also known as the General Provident Fund. It is a Public Provident Fund account. It is available for all the Government employees in India. In this scheme, a certain amount gets deducted from your salary. This amount was gathered throughout the employment term. After retirement, this amount is paid to you.
According to the government rules, the following mentioned are eligible for GPF subscription-
- All the permanent government employees.
- All the temporary government servants after one continuous year of the service period. You must not be eligible for CPF.
- All the re-employed pensioners.
The interest rates on GPF gets modified quite often. The new amended rate suggests it to be 7.9%.
Once you’ve joined the duty of a government employee, you must subscribe to the GPF. Once you’ve subscribed, you must contribute towards GPF. It must continue until your suspension. Yet, before 3 months of your retirement date, GPF contribution ceases.
GPF Withdrawal Rules
According to the Pensioner’s Official Portal, you’re subscribed to GPF once you start contributing a certain amount from your salary. Provided you’re a government employee in India.
While subscribing to GPF, you need to nominate a family member as a nominee. Anyone who deserves to avail the GPF amount in your absence can get regarded as a nominee. During the withdrawal of GPF, the nominee won’t get interrogated about any documents. Yet, it is valid only during an emergency.
These nominee criteria are used in case you die before your retirement. In that case, your job gets provided to your nominee. The nominee is either your elder child or spouse. But in certain cases, your younger brother or sister can also take over. It should be any one of your family members. Here, family means wife, children (including adopted), grandparent (paternal) in case parents absent, minor brother, sister (unmarried), deceased son’s widow or children.
You must make sure they’re meritorious for this position. In case the nominee is minor, he/she will get nominated after training. In case you’ve two nominees, you must specify the share of each nominee. In case you’ve no family, you can nominate any person from your company/charitable or trust. You’re free to cancel/change your nominee. All you’ve to do is send a notice with a new nomination.
Apart from this, the nominee also gets an extra amount. It is the average amount in your GPF amount for 3 years. Yet, this amount shouldn’t exceed Rs. 60,000. To avail of this, you must have paid service for at least 5 years at the time of death.
In case no nominee’s chosen, the family will get credited with GPF. All the family members will receive it in equal shares. Yet, there are certain exclusions.
- Adult sons/grandsons
- A married daughter whose husband is alive.
After your retirement, an immediate injunction gets carried out to transfer the amount into your account on the last working day. You don’t have to provide any documents or applications for this transfer. Before 3 months from the day of your retirement, the contribution to your salary ceases.
You’re required to contribute monthly to GPF. In case you’re suspended, it pauses during your suspension period. Before 3 months of your retirement, it completely ceases.
GPF Withdrawal Guidelines
In good news for all the government employees of India, the norms for GPF withdrawal have relaxed. According to the latest norms, you can now receive your GPF amount within 15 days of the issue. Yet, you’ve to mention your cause of withdrawal. You can withdraw GPF for education purpose, self or family marriage, health issues, etc. covering all institutions.
You can withdraw GPF after completing 10 years of service, as against 15 years of service earlier. You must have 10 years to retire or completed 15 years of the service period.
There are frequent amendments made for its improvisation. The need felt to liberalize the presentation and raise limits. The amended provision now allows withdrawal for liberalized causes, like marriage, betrothal, funerals, or other ceremonies. It also includes health hazards, education, covering all streams.
You can now withdraw up to 12 months’ salary or 75% from GPF. Whichever is less will get consideration. In exceptional cases, it can get permitted up to 90% of the amount standing at credit. You may seek withdrawal after 10 years of service.
Listed Below Are Some Main Facts
1. The latest amended rule will benefit about 50 lakh central government employees. GPF can withdraw for various causes like education, health, etc.
2. The amount can also withdraw for purposes like marriage, engagement, or any family functions.
3. You can withdraw the largest of 90% of your amount standing at credit. Yet, it is only in certain exceptional cases like accidents, illnesses. Otherwise, you’re affiliated to withdraw up to 75% of outstanding money in GPF or 12 months pay. Whichever below must get consideration.
4. For causes like house buy or repayment of home loans, construction of houses, etc. you can withdraw a maximum of 75% of the total outstanding amount in GPF. It also includes house renovation or alteration of the ancestral house.
5. You can also withdraw GPF for the buy of a new vehicle, repayment of car loans, or booking of vehicles. For such cases, you will get permitted to withdraw 75% of the amount at discard in the GPF account or 75% of the vehicle’s cost. Whichever be less will get consideration.
6. Earlier, it allowed withdrawing 90% GPF before a year of retirement without any cause. But now, it has modified to 2 years. You can withdraw 90% of money without giving any valid cause.
7. In case of emergency, the nominee can sanction for GPF. He/she will not get questioned about any documents. The nominee has to provide a self-declaration of the cause of sanction.
8. You will get credited with the requisite amount within a max of 15 days. Yet, in cases of emergency like illness or accident, it can reduce to 7 days.
Eligibility For Withdrawing GPF
Every funding has some of the other criteria to get fulfilled. For GPF, you need to fulfill the below-mentioned criteria to avail-
i. You must be a government employee in India.
ii. You must be a resident of India.
iii. It will help if you are affiliated under a certain salary range.
iv. If you’re a temporary government servant, you can subscribe to GPF after a continuous service of 1 year.
v. All re-employed government servants are eligible to subscribe to GPF.
vi. The government officials serving under establishments covered by the EPF Act, 1952.
But, if you’ve joined after 2004, you will come under the National Pension System (Central government) or the National Pension System (State government).
vii. If your per annum income is 6.5 lakh per annum, you’ll avail of a tax rebate. If you invest Rs. 1.5 lakh in PPF, GPF, or Insurances.
GPF Interest Rates
There has been a drastic decrease in the GPF interest rate. The finance department has lowered it to 7.9% by 10 basis points from 8%. It has been enforced with effect from July 1, 2019.
1. How many times can you withdraw GPF?
There are no certain criteria present about how many times you can withdraw GPF. You can withdraw as many times as you can. Yet, a minimum of 4 months gap between two advances you must maintain. For withdrawal, 6 months gap must get maintained. In exceptional cases, the duration can cut.
2. What is the minimum amount you contribute to GPF?
A minimum of 6% of your primary pay gets deducted as a contribution to GPF. Under this scheme, you’re provided with a pension after retirement. If you die (accident or illness) before your retirement, your seat will be offered to your nominee. The elder child gets regarded as your nominee. In case no child or the child is small, the wife becomes the nominee. In some cases, your younger brother or sister is also regarded as the nominee.
3. Can you convert a temporary advance of GPF into a part final withdrawal?
Yes, you can convert a temporary advance of GPF into a part final withdrawal. All you’ve to do is take permission from the competent authority.
4. How to withdraw GPF before retirement?
You can withdraw about 90% of your GPF before 2 years of your retirement. Earlier it was 1 year of retirement. You wouldn’t get interrogations for any cause.
5. Is tax implemented on GPF withdrawal?
No, the tax imposed on GPF withdrawal is not taxable at the time of termination of your account. Even if you want to withdraw the permissible amount during the course of your service, it is not taxable. Here the permissible amount refers to the salary up to 12 months or 75% balance in your GPF account.
So, if you’re a government employee in India and want to avail of GPF fruits, go for it soon. It is an amazing piggy bank for your future financial goals. Be it your child’s education, marriage, house, property, etc. GPF is your ultimate backup. I hope the article helped you make the most of your General Provident Fund account.