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The General Provident Fund (GPF) is a secure savings scheme for government employees. A portion of your salary is deducted every month, providing a substantial retirement benefit along with 7.1% interest. This tax-free interest and government guarantee make it extremely reliable.

What is the General Provident Fund (GPF)?
Government employees are likely familiar with the General Provident Fund (GPF). They consider it a highly reliable and beneficial savings scheme. This scheme not only ensures regular savings from your salary but also provides a strong financial security after retirement. So, if you are a government employee, you may have noticed a "GPF deduction" on your pay slip. Many employees are confused about this deduction, but it can actually be considered an important part of your long-term financial security.

What is GPF and how does it work?
GPF, or General Provident Fund, is a savings scheme exclusively for government employees. In this scheme, a fixed portion of your salary (basic + DA) is deducted every month and deposited into this fund with your knowledge. This money is kept safe with the government and earns interest. The most important thing is that GPF is completely under government control, so there is no investment risk, meaning market movements do not affect this fund.

Interest Rate and Return Features
Currently, GPF offers an annual interest rate of 7.1%, which is reviewed by the government every three months. This interest rate is considered stable and reliable compared to many other savings schemes. If an employee invests in GPF consistently for 15 years, he or she can receive a corpus of approximately ₹31.60 lakh at the time of retirement. With regular investment for 10 years, this amount can reach approximately ₹17.20 lakh.

Who has to pay tax on GPF?
Under Rule 9D of the Income Tax Rules, 1962, non-government employees are now required to pay tax on interest earned on their EPF (Employees' Provident Fund) if their employer's annual contribution exceeds ₹2.5 lakh. For government employees, this limit is set at ₹5 lakh, provided there is no employer contribution to their provident fund. This provision was implemented by the Central Board of Direct Taxes (CBDT) last year. The rule aims to bring more interest income into the tax net and make the savings system transparent.

Who can invest?
The General Provident Fund (GPF) is a government savings scheme in which only government employees can invest. The scheme's benefits are available to permanent government employees or temporary employees with a service period of more than one year. This scheme is specifically for employees who joined government service before January 1, 2004, as the National Pension System (NPS) was implemented for employees appointed after that time. Re-employed pensioners can also invest in this scheme, provided they are not contributing to any other provident fund.

Financial Security in Retirement
After retirement, when your salary source ends, GPF funds become your biggest financial asset. It can easily handle household expenses, children's education, medical emergencies, or any major expense. The government guarantees this fund, making it completely safe.

Why is GPF Special?
GPF is a reliable long-term investment plan for government employees. It involves no market risk, the interest rate remains stable, and the lump sum received upon retirement is tax-free. This scheme not only provides employees with financial security but also gives them peace of mind that their future is secure.

GPF Conclusion
GPF is the smartest way for government employees to "save from their salary." It essentially grows alongside your career and provides stability for your life after retirement. So, if you're investing in GPF, rest assured—it's the safest way to convert your hard-earned money into future security. (Note: This article is for informational purposes only and should not be construed as investment advice. Consult a financial advisor before making any investment decisions.)

Disclaimer: This content has been sourced and edited from Dainik Jagran. While we have made modifications for clarity and presentation, the original content belongs to its respective authors and website. We do not claim ownership of the content.