Insights on Interest Admissibility Beyond Rupees 5 Lakh GPF Subscription – Important Clarification

DoPPW has issued an important Clarification regarding Interest Admissibility Beyond Rupees 5 Lakh GPF Subscription subject to applicable income tax.

Clarification regarding Interest Admissibility Beyond Rupees 5 Lakh GPF Subscription

3/6/2021-P&PW(F)
Government of India
Ministry of Personnel, P.G. and Pensions
Department of Pension and Pensioners’ Welfare

3rd Floor, Lok Nayak Bhawan,
Khan Market, New Delhi Dated: 02.05.2024

OFFICE MEMORANDUM

Subject: Clarification regarding admissibility of interest over and above the threshold limit of Rupees Five lakhs deducted towards GPF.

The undersigned is directed to say that in accordance with the General Provident Fund (Central Services), Rules, 1960, the amount of subscription to the GPF in respect of a subscriber, shall not be less than 6% of the emoluments and not more than total emoluments of the subscriber.

Subsequently, Rules 7, 8 & 10 of the General Provident Fund (Central Services) Rules, 1960 were amended vide Notification No. G.S.R. 96 dated 15.06.2022. As per the said Notification dated 15.06.2022, 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 (at present Rupees Five Lakh) referred to in sub clause (i) of clause (c) of the Explanation below sub rule (2) of the rule 9D of the Income Tax Rules, 1962 [as inserted vide Notification No. G.S.R. 604 (E) dated 31.08.2021 of Ministry of Finance, Department of Revenue (Central Board of Direct Taxes)].

2.Further, instructions were issued vide this Department’s OM No 3/6/2021- P&PW (F) dated 11.10.2022 and OM No. 3/13/2022-P&PW(F) dated 02.11.2022 for strict implementation of the above amended provisions of the General Provident Fund (Central Services), Rules, 1960.

3.References have been received in this department for payment of interest on the amount exceeding Rs.5.00 lakhs deducted towards GPF subject to deduction of Income tax for the year 2022-23. The matter for payment of interest on excess amount of Rs. 5.00 lakh towards GPF subscription has been reviewed again in consultation with Ministry of Finance and it has been decided that where the amount of total subscription towards GPF in the year 2022-23 in respect of a Government servant exceeds Rs. 5.00 Lakh, the interest on the excess subscription may be paid, subject to applicable income tax.

4. All Ministries/Departments are requested that this revised provision may be brought to the notice of the personnel dealing with the GPF matters in the Ministry/Department and attached/subordinate offices there-under for clarification and implementation.

5.This issues with the approval of competent authority.

(Dhrubajyoti Sengupta)
Joint Secretary

To
All Ministries/Departments of Government of India
(as per standard list)

View the Order pdf