A member of the leadership team with over 17 years spent working at the
intersection of Investment Analysis, Personal Finance, and Technology.
Hands-on experience across multiple functions including Index Construction,
Index Maintenance, Asset Allocation, Portfolio Construction, Managing a
team of Digital Relationship Managers, etc
A member of the leadership team with over 17 years spent working at the
intersection of Investment Analysis, Personal Finance, and Technology.
Hands-on experience across multiple functions including Index Construction,
Index Maintenance, Asset Allocation, Portfolio Construction, Managing a
team of Digital Relationship Managers, etc
Every working professional comes across a provident fund. All provident funds are savings schemes categorised based on their name, which helps create a substantial corpus for post-retirement life. There is EPF, which stands for Employee Provident Fund, while GPF stands for General Provident Fund. The GPF is available only for government employees. On the contrary, EPF is available for all employees in the private sector. Thus, there are significant differences between GPF and EPF.
Difference Between GPF and EPF
Parameters
GPF
EPF
Eligibility
Only government employees
Only organised sector employees
Interest Rate
7.1% p.a.
8.15% p.a.
Minimum Contribution
6% of employee’s salary
Since April 2021, 10% of employee’s salary. Earlier it was 12%.
Maximum Contribution
100% of employee’s salary
Anything above 12% has to be contributed to VPF
Maturity period
Till retirement
Till the age of 58 years
Premature Closure
On resignation or suspension of government service
2 months of unemployment of subscriber
Loan Facility
Available anytime during the service
No loan facility, only partial withdrawals allowed
Managed by
Department of Pension and Pensioner’s Welfare under the Ministry of Personnel, Public Grievances, and Pensions.
Employees Provident Fund Organisation (EPFO) under the Employees Provident Fund and Miscellaneous Provisions Act, 1952.
Contributions
All government employees must contribute a minimum of 6% of their salary towards GPF. The maximum contribution can be 100% of their salary. Also, contributions can be stopped only in case of suspension or retirement. Such contributions are usually stopped three months before retirement.
Both employee and employer contribute to the employee’s EPF account. The standard contribution of both parties is 12% of their salary (basic + dearness allowance). However, per the new amendments in 2021, the government has reduced the EPF contribution to 10% for both employers and employees.
Loan Facility
A government employee can avail of a loan from their GPF account anytime during their employment.
In the case of EPF, the employee can avail of up to 50% of the EPF amount after seven years of service for marriage and education. Similarly, employees can avail loan up to 90% of the EPF amount after ten years of service for a home loan.
Tax Benefits
GPF is a tax-free savings scheme. Hence, the contributions, interest earned and returns are exempted from tax under Section 80C of the Income Tax Act, 1961.
The contributions in EPF account up to INR 1.5 lakh are eligible for tax deductions under Section 80C of the Income Tax Act, 1961. Also, if the subscriber withdraws the balance amount from the EPF account after five years of creation, it is exempt from tax.
Trupti Jalan is a Certified Financial Planner. She has diversified and rich experience in personal finance for more than 5 years. Her previous associations were with asset management companies and investment advising firms. She brings in financial markets subject matter expertise to the team and create easy going investment content for the readers.
In this article
Google Play 
App Store 
Show comments