What is GPF and how it’s different from PPF

A GPF or General Provident Fund is the type of provident fund that can be availed of by governmental employees exclusively. Any government employee in India can avail of this benefit and this fund is not available for employees of the private sector. The procedure is very simple and contribution towards GPF is mandated for a certain class of government employees. A government employee simply has to contribute a fixed part of her/his earnest monthly salary towards the General Provident Fund. As time proceeds, the fund goes on accumulating and hence, a substantial corpus is created by the time of maturity. The time of maturity is the superannuation or retirement of the employee and an employee can nominate any dependent family member as the beneficiary in the event of her/demise. Thus, GPF acts as a retirement corpus, the benefits of which can be claimed by an employee at the time of her/his retirement.

On the other hand, a Public Provident Fund or PPF is saving scheme which is available for all the eligible citizens of India and from any sector of employment. The plan maturity period for a PPF account is 15 years from the date of setting up of the account. Any citizen of India who is working in private sector or is self-employed can also open a PPF account. The minimum contribution towards a PPF account is Rs. 500. There is an upper capping on the contribution and the maximum that can be contributed is Rs 1.5 Lac. An important feature of PPF is the tax efficiency that it carries. The contributions towards PPF are eligible for tax exemptions under Section 80C of the Income Tax Act, 1961. Moreover, the accrued interest in a PPF account is exempt from taxation as well. However, unlike GPF, against which loan can be availed and advance payments can be sought, no such feature is available for PPF, as partial withdrawals are not available.

HDFC Life offers various retirement and pension plans that seek to secure your finances during your retirement years and allow you to create a sufficient corpus for your benefit and the benefit of your dependent spouse. For details, click on the mentioned link: https://www.hdfclife.com/retirement-and-pension-plans. 

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