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The government runs many savings schemes. These include Provident Fund (PF). Provident funds are of three categories. Public Provident Fund (PPF), Employee Provident Fund (EPF), and General Provident Fund (GPF). After the GPF scam came to light in the Municipal Corporation of Satna city of Madhya Pradesh, there is a lot of discussion about GPF now. In this scam, the GPF branch clerk has withdrawn lakhs of rupees from the GPF account of the permanent employees of the corporation. Many people consider GPF and EPF to be the same, whereas it is not so. There is a lot of difference between these two.

Only government employees can contribute to GPF. On the other hand, private sector employees can also contribute to EPF. GPF gives a lump sum amount at the time of retirement. On the other hand, EPF matures when the employee turns 58 years old. Contribution to GPF, interest earned, and returns are tax-free under Section 80C of the Income Tax Act, 1961. Contributions of up to Rs 1.5 lakh in EPF account are eligible for tax deduction under Section 80C of the Income Tax Act, 1961.

Employees Provident Fund (EPF)

Employees Provident Fund (EPF) is for employees of companies where 20 or more employees work. This scheme has been created to ensure the financial security of employees after retirement. A certain part of the employee's salary is deposited in EPF. Along with this, the company also contributes the same amount. However, out of the total contribution made by the company, only 3.67% goes to EPF, while the remaining 8.33% is deposited in the Employees' Pension Scheme (EPS). After retirement, the amount deposited in EPF is given to the employees in a lump sum. At the same time, the amount deposited under the pension scheme is used as a monthly pension after retirement.

An interest rate of 8.25% has been fixed on EPF for the financial year 2023-24. EPF not only provides financial security to the employees but also meets their pension needs after retirement. Along with this, this scheme is also a protected savings option for private-sector employees. Investing in EPF is not only safe but it also helps in making the future of the employees financially strong.

General Provident Fund (GPF)
GPF (General Provident Fund) is a savings scheme available exclusively for government sector employees. It is not only a safe savings option but it also provides financial stability after retirement. Its flexibility in education, medical, and other emergencies makes it even more useful. In this, employees contribute a minimum of 6% of their salary and are entitled to the accumulated wealth at the time of retirement. Currently, an interest rate of 7.1% is applicable on GPF.

After completing one year of service, GPF membership is mandatory for all temporary and permanent government employees and re-employed pensioners (who are not eligible for contributory provident fund).

The minimum contribution to GPF is 6% and the maximum is 100% of the salary. A GPF subscriber is allowed to withdraw from the fund for various needs such as education, medical emergency, marriage, or buying a house. GPF matures at the age of retirement or superannuation of the concerned government employee. To withdraw from the fund, the employee has to complete 10 years of service.

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