GPF Rules - General Provident Fund Deposit, Withdrawal, Nomination

Introduction: Understanding the General Provident Fund (GPF) and Its Role

The General Provident Fund (GPF) is an important retirement-savings scheme available to many government employees in India. Under this scheme, subscribers regularly deposit part of their salary into a special fund which accumulates over years and earns interest. At the time of retirement, resignation or on other permitted occasions, they can withdraw their accumulated amount (along with interest). The GPF serves as a safe, long-term savings instrument and helps ensure financial security for public servants.

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What Is the GPF and Who Is Eligible to Subscribe?

The GPF is a provident fund scheme framed under rules like the General Provident Fund (Central Services) Rules, 1960 and state-level counterparts (depending on jurisdiction).

Eligibility Criteria

• Government employees (central services or state services) who are eligible under their service rules may subscribe to the GPF.
• Typically, employees who are in a pensionable post or under service rules that allow GPF subscription. Some temporary employees may also be eligible if service conditions are met.
• The exact eligibility will depend on the particular GPF Rules applicable to your service (Central vs State).

Understanding eligibility is important because non-eligible persons cannot open a GPF account or benefit from its features.

How Deposits into GPF Work – Subscription, Interest & Account Maintenance

Monthly/Regular Subscriptions

• Subscribers are required to regularly deposit a portion of their salary (often specified percentage or amount) into the GPF.
• The deposits are credited to the subscriber’s GPF account by the employer or the concerned disbursing office.
• The contributions accumulate continuously until the subscriber resigns, retires, expires or transfers to a non-eligible service.

Interest Accrual

• The balance in the GPF account earns interest at a rate declared by the Government for that year. For example, as of June 2025 the rate was around 7.1 %.
• The interest is credited annually, compounding over years, which means the longer you remain subscribed, the larger your accumulated corpus becomes.
• It is vital that contributions are timely and the account is regular for full interest benefit.

Account Maintenance, Statements & Records

• The GPF account is maintained by the relevant accounts office (such as Office of the Accountant-General or similar). Manuals such as the “Manual of General Provident Fund Section” provide detailed procedures.
• Subscribers should receive annual account statements showing contributions, interest credited, withdrawals/advances and balance.
• It is wise to review your GPF statement each year to ensure accuracy of entries, detect missing credits, and note the balance.

Withdrawal, Advances & Final Settlement Rules under GPF – When and How You Can Access Funds

Types of Withdrawals / Advances

GPF rules allow certain temporary advances, non-refundable withdrawals and final settlement under specific conditions.

Temporary Advances

• Advances may be granted under rules for specific purposes (such as housing, child’s education, medical emergencies).
• The amount, repayment terms and maximum quantum will depend on the rules in force.
• These are distinguished from full withdrawals in that you expect to repay or remit as per rule.

Non-Refundable Withdrawals / Withdrawals Before Final Settlement

• GPF subscribers may be permitted to withdraw part of their balance (often up to a certain percentage of balance) for specific purposes: e.g., purchase of land/house, repair/renovation, medical treatment.
• For example: for education or marriage of a dependent family member, up to 75% of outstanding balance or 12 months’ emoluments whichever is less.
• For medical emergencies, even up to 90% in certain cases.
• Timing and tenor: Some rules allow withdrawal “within two years of retirement” or earlier for certain categories.

Final Withdrawal / Settlement

• When a subscriber retires, resigns, dies, or becomes otherwise eligible for closure of service, the entire balance (contributions + interest) becomes payable. The nominee or legal heir may claim in case of death.
• The account is closed after final payment and no further interest accrues post closure.

Conditions & Limitations

• The amount that can be withdrawn (non-refundable) is limited as per rules; misuse or withdrawal for other purposes may be disallowed.
• Advances/withdrawals should usually be used for the declared purpose, e.g., you withdraw for house construction and furnish proof. Some rules emphasise this.
• Payment of interest stops from the date the subscriber ceases service or after closure of account.
• Withdrawal rules may differ depending on whether service continues, whether the post is pensionable, or if the subscriber transfers to non-eligible service.

Nomination, Transfer & Death Benefits under GPF – Protecting Your Savings and Beneficiaries

Nomination Process

• At the time of or shortly after subscription, the subscriber may nominate one or more persons to receive the balance on death of the subscriber before final settlement.
• If more than one nominee is named, the subscriber must specify the share each nominee shall receive.
• Nomination may be varied or cancelled by the subscriber by submitting a fresh nomination form, as per rules.

Death of Subscriber

• Upon death of the subscriber during service, the nominee(s) or legal heirs (if no nomination) may apply for payment of the balance in the GPF account.
• Some rules specify that the payment made in accordance with a valid nomination constitutes a full discharge to the Government.

Transfer of Service and Account

• If a subscriber transfers from one department to another (within government), the GPF account may be transferred and service continuity recorded so that the deposit/subscription/interest record remains intact.
• The fund account ledger, interest calculation and postings should reflect the transfer date and continuation.

Important Rules, Conditions and Things Government Employees Must Keep in Mind

• Minimum period of service / eligibility for full benefit: Some GPF rules specify that a non-refundable withdrawal may only be taken after a certain number of years of service or within a fixed period of retirement.
• Ceasing of subscription: At or before retirement, the GPF subscription may cease; after closure, no further deposits are made.
• Interest rate revisions: Government announces interest rate for GPF deposits annually or periodically; rate may change and existing deposits earn rate declared for that year.
• Account closure and residual interest: On final payment, interest is calculated upto date of closure; after that no further interest. Manuals explain details.
• Record keeping: Keep your serial number, subscription records, annual statements and any correspondence. This is important should questions arise later (e.g., missing credits).
• Nomination remains important: Without a valid nomination, heirs may face delay in payment; ensure you have made or updated nomination.
• Withdrawal/advance conditions must be met: If you withdraw for a purpose (e.g., house construction) you may need to complete that purpose/use and submit evidence if required.
• Non-transferable to private sector: GPF is essentially for government employees; transferring to a post where GPF is not permitted may affect benefits.
• Tax treatment: While GPF deposits and interest enjoy certain exemptions/treatment (depending on rules), you should check your tax liability each year accordingly.

Summary: Making the Most of Your GPF Account

For a government employee, the General Provident Fund is one of the most reliable saving instruments, offering safety, a good rate of interest, and long-term accumulation. To benefit fully: ensure you subscribe regularly, monitor your account statements, keep nomination updated, understand when you can withdraw or take advance, and plan for your final settlement at retirement. With careful management, GPF becomes a key pillar of your retirement planning and financial security.