EPFO Rules– Good news for EPFO members. The Employees Provident Fund Organization (EPFO) has made a major change in the PF withdrawal rules, which will provide relief to lakhs of salaried employees who are buying a house for the first time. Now employees can withdraw money from their PF account for down payment. Experts believe that this change will boost the demand in the housing sector, however, it is advisable to take decisions keeping in mind the safety of retirement funds.
You can withdraw 90% amount from PF after 3 years
Under the new changes, EPFO members can now withdraw up to 90% of the amount deposited in their PF account, provided the account is at least 3 years old. This withdrawal can be made for house down payment, EMI or construction of a new house.
Earlier this facility was available only after 5 years and the withdrawal limit was the total deposit amount for 36 months and the property price, whichever is less. Also, if a member was a part of any housing scheme, he could not withdraw.
The new Para 68-BD added to the EPF Scheme, 1952 now removes these restrictions and gives first-time homebuyers the option to avail this facility only once in their lifetime.
Experts’ opinion: Buying a home has become easier
Abhishek Raj, founder and CEO of Genica Ventures, called it a “game-changer for India’s housing market.” He said, “The biggest hurdle in buying a home has always been the down payment. Now that people can use their PF savings, this hurdle has been largely eliminated.”
Talking to customers in cities like NCR, Pune, Indore and Lucknow, he has observed that people are now looking more enthusiastic and serious than before. However, he also warns that this withdrawal should be done wisely so that retirement security is not jeopardized.
TRG Group MD Pawan Sharma said that relaxation in PF withdrawal rules will directly benefit the housing market, especially in fast-growing areas like Noida and Greater Noida.