For most salaried individuals in India, the Employees’ Provident Fund (EPF) is a crucial savings instrument. It serves not only as a retirement fund but also as a financial safety net when needed. Very few employees are aware that PF money can be withdrawn under certain circumstances, even during their employment. Specifically, if an employee wants to buy or build a house or repay a home loan, their PF savings can be a significant help.
Under EPFO rules, employees are allowed partial withdrawals for housing-related needs. However, certain eligibility criteria and withdrawal limits are in place. Adhering to these rules is essential for employees to avail themselves of this facility.
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What are the rules for PF housing withdrawal?
The EPFO scheme includes provisions related to housing withdrawals. Generally, the employee must be a PF member, have an active UAN, and their Aadhaar, PAN, and bank KYC details must be complete. Additionally, the property for which the money is being withdrawn must be in the employee’s name, their spouse’s name, or jointly in both their names.
For buying or constructing a house, a minimum of 5 years of membership or service is usually required, although some updated provisions mention the facility being available for shorter periods in certain cases.
How much PF money can you withdraw to buy or build a house?
According to EPFO rules, an employee can generally withdraw the lowest amount among three criteria: 36 months of basic salary and DA, the total PF balance, or the cost of the house. In some situations, withdrawals of up to approximately 90 percent of the total PF balance may be permitted, especially in cases of home loans or other housing needs.
PF withdrawal rules for repaying a home loan
Employees can also withdraw money from their PF to repay a home loan. This usually requires a certain number of years of service, and the property must be owned by the employee or their spouse. This facility is typically available only a limited number of times in a lifetime, so it should be used judiciously. \
PF Rules for Home Repair or Renovation
PF funds can be withdrawn for the repair or expansion of an existing house. Generally, the house must be at least 5 years old. The withdrawal limit for renovation is usually based on 12 months of basic salary and DA, or the member’s contribution, whichever is less.
How to Apply for a PF Housing Advance
Applications for PF housing withdrawals are typically made using Form 31. The online claim process has been made quite simple, and claims can be settled quickly if the documents are in order.
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Important Points to Remember
Housing PF withdrawals are usually a one-time benefit, so it’s important to use them at the right time. It’s also crucial to purchase the house or begin construction within the stipulated timeframe after the withdrawal.
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Rohit P
My name is Rohit Pal, and I have been working in the field of journalism for the past five years. During this time, I have written on a variety of topics, including business, automobiles, technology, and politics. I have worked with several major organizations and am currently working with Timesbull.
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