Govt puts 5L ceiling on GPF subscription

Mumbai: In a remarkable move, the central government has put a ceiling of Rs5 lakh on subscription to General Provident Fund (GPF) in a financial year.

In accordance with General Provident Fund (Central Service) Rules, 1960, the amount of subscription to the GPF in respect of a subscriber, shall not be less than six per cent of the emoluments and not more than total emoluments of the subscriber. However, there was no ceiling on the total amount of subscription of a subscriber into his GPF account in a financial year, says a govt notification.

Talking to Bizz Buzz, Michael Dias, member, central board of trustees, EPFO, and secretary of Employers' Association in New Delhi, says, "Some people were misusing the facility of making PF contribution which is a government security and hence the safe mode of investment. Mostly rich people were availing of the facility, whereas it is meant for poor and middle class of the society so that when one retires from the government job, one has decent amount in one's bank account to live in a decent manner."

As of now, EPFO offers 8.1 per cent interest annually which was higher than a fixed deposit in a bank.

Rules 7, 8 & 10 of the General Provident Fund (Central Service) Rules, 1960 have been amended vide Notification No GSR 96 dated June 15. As per the notification, the sum of the monthly subscription by a subscriber under the GPF during a financial year together with the amount of arrear subscriptions deposited in that financial year shall not exceed the threshold limit of Rs 5 lakh.

All ministries/departments have been asked that the above amended provisions of the GPF Rules, 1960 regarding limit of subscription under GPF in a financial year by a subscriber may be given wide publicity to all Government servants and, more particularly, to the personnel dealing with the GPF matters in the Ministry/Department and attached/subordinate offices there-under, for strict implementation.