Now, more leeway for home, education advances

In what is being termed as a move aimed to address the often raised demands of government employees and give a stimulus to the economy by raising withdrawal limits and simplifying the administrative procedure, the Central Government has recently amended the provisions of General Provident Fund (Central Service) Rules, 1960. The Department of Pension & Pensioners' Welfare, Ministry of Personnel, PG & Pensions, GOI has issued information on these amendments vide its Office Memorandum no: 3/2/2017- P&PW (F)(ii) dated March 7, 2017.

Some of the main changes brought about in the category of withdrawals for education, obligatory expenses, illness and purchase of consumer durables is allowing of withdrawals for primary, secondary and higher education, covering all streams and institutions (as opposed to only higher education earlier), and increase of withdrawal limit from earlier 3 months' pay or half the amount at credit, to up to 12 months' pay or 3/4th of amount at credit, whichever is less. Also, this is now admissible to a subscriber after completion of 10 years of service against the earlier general eligibility of completing 15 years of service.

In the category of withdrawals related to housing, housing loan repayment, purchase of house site, renovations to house etc also amendments have been introduced to the extent that the permissible withdrawal of upto 90% of balance at credit has been delinked from the limits prescribed under HBA Rules and can be availed by a subscriber any time during his service. Also, the present instructions that subsequent to the sale of house for which GPF withdrawal had been availed, the amount withdrawn had to be deposited back, has also been removed.

Similarly, amendments have been made in clauses related to withdrawal made for the purchase of motor car/motor cycle/scooter etc, repayment of loan taken for the same, extensive repairs of motor car and making a deposit to book a motor car. For these, the rules now permit for withdrawal of a common limit of up to 3/4th of the amount at credit or cost of the vehicle, whichever is lesser. The permissible service duration eligibility of subscriber for being allowed these withdrawals has also been brought down from earlier limits of 28 and 15 years to 10 years of service.

In addition to the above, withdrawal of up to 90% of balance without assigning a reason, which is presently allowed to subscribers due for retirement or superannuation within a year, is now proposed to be allowed for up to two years before superannuation.

Along with the rules, the administrative procedures for withdrawals has also been substantially simplified. The requirement of submission of documentary proof of reason for withdrawal has now been removed and a simple declaration form by the subscriber explaining the reason for withdrawal would suffice. The declared Head of Department is now empowered to sanction the withdrawal of his employees.

The rules for sanctioning of withdrawals have also, been amended and a maximum time limit of 15 days has been fixed for sanction and payment of withdrawal from the fund. The earlier version of the rules did not have any time limit for this, which often was alleged to have resulted in undue harassment of the subscriber by the sanctioning authority.