If a govt. employee subscribing to general provident fund managed by the govt., is there any limit like in terms of percentage? or he can pay any amount to claim tax exemption without violating the rule under 80c.?
6 Replies
Amir
(Learner)
(4016 Points)
Replied 04 February 2010
Dear Chankaya,
I think u r talking about Public Provident Funds(PPF)...
The maximum amount that can be invested in A YEAR in PPF A/c Rs. 70,000 ...
Yes it is eligible u/s 80 C, but then maximum Deduction u/s 80 C cannot exceed Rs. 1Lakh
Sushmita
(Finance Officer)
(142 Points)
Replied 05 February 2010
I agree with amir, PPF deposits qualify for rebate under section 80-C.
S. KARMAKAR
(Senior Accounts Officer)
(30 Points)
Replied 10 February 2010
Dear Mr. Chanakya You want to know the maximum limit upto which a Government employee can subscribe to GPF. You have not mentioned whether you are talking about an employee of a State Government or Central Government. The GPF for the Central Government employees is governeed by "the General Provident Fund(Central Services) Rules, 1960"Book is available in market.The rates of subscriptttion have been stipulated in Rule 8 which inter alia stipulates that (a) it shall be expressed in whole rupee (b) it may be any sum, so expressed not less than 6 percent ofhis emoluments and not more than his total emoluments.(c) Emoluments means the basic pay(pay in the Pay Band + Grade Pay) + Dearness Pay(at present there is no Dearness Pay under 6 CPC) which the Government servant was entitled on 31st March of the preceding year.For the purpose of calculation of Income Tax the GPF subscriptttion beyond Rs.1,00,000 in a Financial Year is ignored but the whole amount (beyond Rs.1,00,000 also)will earn interest @ 8%. The subscriptttion in exess of the emoluments will not be accepted by the Accounts Officer for credit int his GPF Account.
VANYA GARG
(ARTICLE ASSISSTANT)
(254 Points)
Replied 27 April 2011
sir,
if any employee claims the G.P.F. of Rs.150065/-, then will his claim upto Rs.100000/- is admissible or any other thing is to be considered.
U S Sharma
(glidor@gmail.com)
(21063 Points)
Replied 27 April 2011
Rates of Contribution:
a) The Employees' Provident Fund Scheme
In respect of establishments employing 20 or more persons and engaged in industry notified under Section 6 of Act ( other than the Establishments. declared as sick ) 12% of the basic pay DA , Cash value of food concession and retaining allowance , if any, subject to a maximum of Rs.6500/- per month. Voluntary higher contributions are also acceptable at the joint request of the member and the employer . However, the rate of contribution is 10% in respect of the following categories of establishments:
- Any establishment covered prior to 22.9.97 in which less than 20 persons are employed.
- Any sick industrial company as defined in Clause(0) of Sub-Section(1) of Section 3 of the sick industrial companies ( special provisions ) Act 1985 and which has been declared as such by the Board for Industrial and Financial Reconstruction.
- Any Establishment which has at the end of any financial year accumulated losses equal to or exceeding its entire net worth.
- Any Establishment engaged in manufacturing of (a) Jute , (b) Beedi , (c) Brick , (d) Coir (other than spinning sector), (e) Guar Gum Industries/Factories.
b) The Employees' Pension Scheme
From and out of employer's share of Provident Fund contributions 8.33% of the total wages limited to Rs. 6500/- per month is segregated and credited to the Employees' Pension Fund in A/C No. 10 ( w.e.f. 1-06-2001 ).
The Central Government also would contribute at the rate of 1.1 / 6% of total wages.
c) Employees' Deposit Linked Insurance Scheme:
No amount is recovered from employee's wages . Employer should pay 0.5% of total wages subject to a ceiling of Rs. 6500/- per month ( w.e.f. 1-06-2001 ).
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