- EPFO members can withdraw up to 90% of their PF balance after 3 years for home purchase.
- Withdrawal is allowed for down payment, EMI payments, or house construction, regardless of housing scheme participation.
- New rule aims to boost housing demand but experts advise careful use to protect retirement savings.
Good news for salaried employees who are saving up to buy their first home. Employees Provident Fund Organization (EPFO) has introduced a notable change in PF withdrawal rules allowing members to access up to 90% of their Provident Fund balance after completing just 3 years in their account. This amount can now be used towards the down payment, paying EMI, or construction of a new house. This change is expected to give a strong push to the housing sector in India.
Key Changes in EPFO PF Withdrawal Rules for Home Buyers
Earlier, members had to wait for 5 years and were restricted to withdrawing an amount limited to 36 months’ contributions or the property price, whichever was lower. Furthermore, employees who were part of any housing scheme could not avail this benefit. These restrictions have now been removed through the addition of Para 68-BD in the EPF Scheme, 1952.
Under the new rules:
- Members can withdraw up to 90% of total PF deposits in their account after 3 years.
- This can be done once in a lifetime and can be used for house down payment, EMIs, or construction.
- It is available for first-time homebuyers irrespective of any housing scheme participation.
Experts’ Views On EPFO PF Withdrawal Change and Impact on Home Buyers
Abhishek Raj, founder and CEO of Genica Ventures, describes this change as a “game-changer for India’s housing market”. He highlights that the major difficulty in buying a home has been the upfront down payment. Now, with access to significant PF funds, this barrier is reduced, allowing more people to invest in property.
He also advises members to use this facility wisely so that their retirement security remains intact.
Pawan Sharma, Managing Director of TRG Group, also welcomes the relaxed PF withdrawal norms, stating it will benefit growing real estate hubs such as Noida and Greater Noida. He expects increased housing demand due to easier fund availability.
How You Can Apply To Withdraw PF Funds For Home Purchase
If you are an EPFO member and wish to avail this benefit, here is how you can proceed:
- Ensure your PF account has been active for at least 3 years.
- Collect required documents such as proof of house purchase or construction.
- Visit the EPFO portal or your employer’s HR department to apply for withdrawal citing the purpose.
- The withdrawal approval usually requires verification of property documents.
- Once sanctioned, funds will be transferred or made available as per EPFO process.
Note: Always consult with your financial advisor before making the withdrawal decision, considering your long-term financial security.
Important Considerations Before Withdrawing EPF Funds
- Retirement Security: Ensure that withdrawal doesn’t severely impact your savings for retirement.
- Single Withdrawal Benefit: You can use this facility only once in your lifetime for house purchase.
- Responsible Usage: Use the funds strictly for intended purposes like down payment, EMI, or house construction.
To learn more or start your application, visit the official EPFO website.