Buying or building a house is the big dream of every working person today. Keeping this need in mind, EPFO provides facility to its members to withdraw PF for household expenses. After the new EPFO 3.0 system, this process has become easier and faster than before. However, it is important to understand that PF can be withdrawn for household, but the full deposit amount is not available.
Basic rules of withdrawing PF for home
As per EPFO rules, PF withdrawal is allowed for buying a house, building a house, repaying a home loan or renovation. These facilities are subject to special rules and limitations. In EPFO 3.0, the process has gone online, but the withdrawal limits and conditions are the same as before, i.e., the process has been simplified and the rules have not been relaxed.
Who can withdraw PF and under what conditions?
To withdraw PF, it is necessary that you are an active member of EPF, your UAN should be active and KYC should be fully updated. The house for which PF is withdrawn should be in your name, your spouse’s name or joint name of both. If there is no proof of ownership of the house, the PF claim for housing will not be accepted.
After how many years of service can PF be withdrawn?
For buying a house or building a new house, a minimum of 3 to 5 years of service is generally considered necessary. This period is long for repayment of home loan and generally PF withdrawal is allowed only after completion of 10 years of service. At the same time, for repairing or renovating the house, at least 5 years must have passed since the house was built.
How much money can be obtained to buy or build a house?
In case of buying or building a house, a maximum of 90 percent of the total PF balance can be withdrawn. Apart from this, another limit also applies, which is 36 months of basic pay and dearness allowance. The lesser of these two amounts will be received as PF.
Rules for repayment and renewal of home loan
If the PF is used to repay the home loan, up to 90 percent of the total balance can be withdrawn. At the same time, only 12 months basic salary and DA is allowed for renewal. Both these facilities can be availed only for a limited time in life.
How long will you get PF and what is the process?
After EPFO 3.0, housing related PF claim has gone completely online. After logging in with UAN, form 31 has to be filled and required documents have to be uploaded. If the KYC and information are correct, the claim is usually settled within 3 working days.
Taxes and necessary precautions
TDS may be levied if entire PF is withdrawn before completion of 5 years of service. Withdrawal of 100 percent PF for house is never allowed. So, use PF wisely to maintain retirement security.