GPF: If you are employed in a government position, various deductions are likely made from your salary. These deductions include PF, VPF, and GPF. Today, we will discuss GPF. It is deducted from the salary of every government employee. Let’s delve into what GPF is and the reasons for its deduction from salaries.
What is GPF?
The General Provident Fund (GPF) is designed for government employees. A portion of each government employee’s salary is allocated to this fund, and upon retirement, they receive a significant amount of money along with accrued interest. GPF is akin to PPF. It remains unaffected by fluctuations in the stock market. The GPF is entirely government-owned and currently offers an interest rate of 7.1 percent. The government reviews the interest rate every three months, although it has remained largely stable over the past few years.
How much money will be accumulated in 15 years?
If you invest in a GPF for 15 years, you will receive Rs 31,60,000 at an interest rate of 7.1%. In 10 years, the amount will be Rs 17.2 lakh. A key advantage of GPF is that the interest earned on GPF deposits is tax-exempt, and the contributions made are also tax-deductible, making it an effective tax-saving instrument. The GPF is exclusively available to government employees who were appointed before January 1, 2004.
For those appointed after this date, the NPS (National Pension System) is applicable. Each month, an employee contributes a portion of their basic salary and DA (dearness allowance) to the GPF. This contribution typically varies from 6% to 100%, which the employee can choose based on their preference.
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