New Delhi: Between the lockdown, there is another shocking news for the government employees. After postponing the Dearness Allowance (DA) until next year, the central government has now decided to cut the interest rates of the General Provident Fund (GPF). New interest rates have been notified in this regard.
According to our www.zeebiz.com will get 7.1% interest on GPF and other funds from 1 April 2020 to 30 June 2020. Till the last quarter, it used to get 7.9 per cent interest. GPF interest rate is fixed on a quarterly basis. GPF is only for government employees. This is a kind of retirement planning. Because its employees get the employees after retirement. Government employees can contribute up to 15 per cent of their salary to the GPF account.
How many types of GPF accounts?
-GPF (Central Services) – General Provident Fund (Central Services)
-Contributory PF (India)
-All India Services PF-All India Services Provident Fund
-State Railway PF-State Railway Provident Fund
-General PF (Defense Services) – General Provident Fund (Defense Services)
-Indian Ordnance Department PF-Indian Ordnance Department Provident Fund
-Indian Ordnance Factories Workman PF-Indian Ordnance Factories Workmen’s Provident Fund
-Indian Naval Dockyard Workman PF-Indian Naval Dockyard Workmen’s Provident Fund
-Defence Services Officers PF-Defense Services Officers Provident Fund
-Armed Forces Personal PF-Armed Forces Personnel Provident Fund
According to Tax expert Anil K., the government employee gets a fixed portion of the amount deposited in the GPF account at the time of retirement. They also have the option of giving some amount in pension. Which they get as pension every month.
How much benefit in income tax?
The income that employees contribute to the PF account is tax-free under Section 80 (C) of the Income Tax. This rule applies to all types of PF accounts.