Last Updated on August 12, 2021 by Galaxy World
Government of Pakistan, Finance Division has issued an OM on 12-08-2021 in connection with Notification of GP Fund Interest Rates 2020-21. These rates of mark-up on state provident fund i.e General Provident Fund are for the Fiscal Year 2020-2021.
Notification of GP Fund Interest Rates 2020-21
According to the Notification, I am directed to convey the rate of mark-up on State Provident Fund i.e General Provident Fund (GP Fund) for the year 2020-21 is as under:
|S. No||Fiscal Year||Rate of Mark-up (Interest Rate GP Fund)|
History of Mark-up Rates
These rates of GP Fund Interest 2021-22 are the lowest ones since 1972. These rates are the lowest one after 1972-73. Before 1972-73 these rates remained between 3% to 7.25%. The highest rates of GP Fund in the history of Pakistan were in 1997-98 that was 22.763. For the same evidence, you can see the GP Fund Interest Rates since 1954. Initially, the rates of markup increased they were once at the peak of more than 22%. But this year they dropped a big. The employees who are getting interest in their General Provident Fund will not feel well after this notification.
These rates are for Federal Government employees. Provincial Governments will issue their own Notifications.
Where We Can Use These Mark-up Rates?
The recently announced marks-up, we can use for many purposes. These rates are useful for the following:
- Calculation of GP Fund Interest on GP Fund Subscription
- Calculation of Interest of Motorcycle Advance / Motorcar Advance
- To Calculate Interest on House Building Advance
Interest on GP Fund Subscription
Every month the Accounts Office deducts the GP Fund amount from the pay bills. These rates are applicable on the GP Fund that has been subscribed to until 30th June 2021. The employees who have Interest Free GP Fund, It will have no effect on those employees. This category of employees gets Interest Free Loan of House Building Advance, Motorcycle/Motorcar Advance. The non-gazetted employees pay no interest on their HBA.
To Calculate Interest on House Building Advance
The non-gazetted employees and employees who get no interest on GP Fund will have to pay no Interest on their HBA. They will get interest free House Building Advance.
The Gazetted employees and employees who get interest on their GP Fund will have to pay interest on their HBA. Employees who got HBA between 1st July 2020 to 30th June 2021 will have to pay interest on HBA @ 7.90.
Calculation of Interest of Motorcycle Advance / Motorcar Advance
They employees who get mark-up on their GP Fund will have to pay interest on their advance of motorcar or motorcycle. These rates will use to calculate the Interest of Motorcycle Advance / Motorcar Advance. The employee who got these advances between 1st July 2020 to 30th June 2021 will have to pay interest @ 7.90%.