EPFO: It is a big dream of every working person to have his own house. To turn this dream into reality, the Employees Provident Fund Organization (EPFO) provides an excellent facility. You can use the amount deposited in your PF account to buy or build a house. With the introduction of the new EPFO 3.0 system, this entire process has now become much faster and transparent.
Withdrawal became easier, these are the new rules
Under the rules of EPFO, members are allowed to withdraw PF money for buying, constructing a new house, repaying the old home loan or repairing the house. The new 3.0 portal has made this system digital and convenient. The application process has definitely become easier, but the limits and basic conditions for withdrawing money are still applicable as before, there has been no relaxation in the rules.
These are the necessary conditions to withdraw PF for home
To avail this facility, it is mandatory for you to be an active EPF member. Also, your UAN should be active and the KYC process should be completely updated. The most important condition is that the house for which you are withdrawing funds should be either in your name, in the name of your spouse, or in the joint name of both.
If you do not have any valid document proving ownership of the concerned property, your claim for housing will be rejected outright. Talking about the length of service, you should have completed at least three to five years of service to buy or build a new house. At the same time, the period for repaying the home loan has been fixed at ten years.
How much amount can you withdraw from the account?
When it comes to buying or building a house, you can withdraw a maximum of 90 percent of your total PF balance. However, there is another technical complication associated with it. This amount cannot exceed the sum of your 36 months’ basic salary and dearness allowance (DA). Whichever amount is less in both these parameters will be given to you as PF claim.
Understand the claim settlement process
If you want money to repair or renovate your existing house, the house should be built for at least five years. For this, you are allowed to withdraw only an amount equal to 12 months’ basic salary and DA. Under EPFO 3.0, Form 31 has to be filled by logging in with UAN. If the information is correct, the claim is settled in three working days.
Keep in mind that facilities like home loan and renovation can be availed only a limited number of times in a lifetime. Additionally, if you withdraw your PF before completion of five years of service, TDS can be deducted on it. Withdrawal of 100% PF for home is never allowed, hence use it only keeping future security in mind.