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EPF Withdrawal Rules: Here's How to Buy Your Dream Home with the Help of PF

(Representative pic: Shutterstock)

(Representative pic: Shutterstock)

Considering the fact that over 70 per cent of Indians contribute to the working population of India, the central government has come up with numerous schemes to make it easier for the general public to buy a property.

Purchasing a house is on every family’s checklist. Living in one’s own house is altogether a different feeling. People dream of investing in housing schemes and making memories in one’s own house. Considering the fact that over 70 per cent of Indians contribute to the working population of India, the central government has come up with numerous schemes to make it easier for the general public to buy a property. Among many one such measure — Provident Fund (PF) scheme, introduced by the Ministry of Labour and Employment.

The PF balance can be used by salaried person for purchasing property. As per the PF withdrawal rules for property purchase, one can withdraw from the PF up to 90 per cent of the balance for buying a home or for home construction on a land.

Terms and conditions for using PF to purchase home or for home construction on a land:

  • For PF withdrawal for home construction, the land has to be owned by the PF account holder, or by his wife or by both.
  • PF withdrawal facility is also available for all Employee Provident Fund Organization (EPFO) members working in the private sector. So, all PF and EPF account holders are eligible for provident fund finance for property purchase.
  • Person who wish to withdraw PF amount for plot buying or for the construction of home or for the home buy, must have contributed in its PF account for at least five years.
  • The eligible amount of withdrawal would depend on the purpose for which you are withdrawing the money. For buying a plot, the PF withdrawal should be either 24 months basic salary of the employee plus Dearness Allowance (DA) or the actual price of the plot, whichever lower, will be allowed as PF withdrawal amount from one’s PF balance.
  • For purchase of construction of home, PF or EPF account holder can withdraw one’s 36 months basic salary plus DA or the actual price of the land or amount required for construction, whichever is lower. In any case, PF withdrawal limit can’t be more than 90 per cent of the PF/EPF balance.

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