The government has decided to allow Employees’ Provident Fund Organization (EPFO) subscribers to withdraw up to 90% from their EPF account for the purpose of purchase and construction of their homes.
The EPFO has amended the scheme by inserting a new paragraph — 68 BD — to the Employees’ Provident Funds (EPF) Scheme, 1952, to enable a subscriber to make down payment to buy homes and pay EMIs through the EPF account, a senior official said.
Applicant should be part of society with at least 10 subscribers
You can now leverage up to 90% of your retirement savings parked in an Employees’ Provident Fund account to build a home of your own.
The government has notified new rules that allow EPF members to make a one-time withdrawal or use their PF savings to make instalment payments for buying a flat or a tract of land to construct a house.
For this new enabling provision to be effective, however, you need to find at least nine other EPF account holders who are part of a co-operative society, where you intend to purchase a flat or land parcel.
The EPF member needs to be a part of a cooperative housing society, registered under any law, with at least ten people subscribed to Employees’ Provident Fund Organisation (EPFO) schemes, according to the notification issued by the Union ministry for labour and employment on April 12.
Previously, employees who completed five years of service were allowed to withdraw Provident Fund savings equivalent to 36 months of the member’s salary (basic salary and dearness allowance) for construction of a flat or 24 months of the salary for purchasing land.
EPF members can withdraw their savings to “purchase a dwelling house or flat including flat in a building owned jointly with others, outright or on hire-purchase basis, or for construction of a dwelling house including the acquisition of a suitable site for the purpose,” the notification said.
Repayment of loans
Employees with at least three years’ subscription to the EPF scheme will be allowed to withdraw their savings for housing purposes, including repayment of housing loans from their monthly contributions.
The facility will be available only once to every member during his or her lifetime. The rule applies to all those who together with their subscriber spouse have at least Rs 20,000 in their accounts.
Sources: The Hindu, ET