Many of us come across this situation in our life once when we do not have sufficient funds in our hands to refinance your dream house. In such a case, one may think of withdrawing money from their employee provident fund(EPF) account to turn their dream into a reality. But do you think is it a wise idea? After all is the money kept aside for the golden years. Let’s discuss this in detail how it works
But is it a wise idea? After all, it is the money saved aside taking a longer time. Let’s see how it works.
Under the Employee Provident Fund (EPF) Scheme, an employee can withdraw the corpus EPF amount from his EPF account after making a contribution of five years to purchase a house/plot or to construct a new house. You may also apply for a loan for the construction of a house on the plot of land owned by you or your spouse, or jointly by both. The amount of the loan depends upon the purpose for which you are availing the loan.
About a year ago, the Employee Provident Fund Organisation (EPFO) has launched a new scheme under which it allows PF subscribers to withdraw 90% of the total money put in the retirement body fund for realty investments. The funds in your PF account can also be used to construct units in non-governmental housing projects too.
Who can withdraw EPF fund for buying a new house?
The following conditions should be satisfied in order to withdraw EPF for buying a house.
- The EPFO member has to be a member of the co-operative society or a society registered under any law for housing purpose and should have at least 10 members to be eligible to withdraw money from EPF account.
- You are ready to purchase a house or a flat or looking for the construction of a new house.
- The employee is a member of EPFO for at least three years.
- The accumulation in the member's PF account including the interest has to be more than Rs. 20,000.
- It can be withdrawn only once in a lifetime.
Steps to follow to withdraw funds from your EPF account
Following are the steps that you are required to follow in order to withdraw from your EPF account.
Step 1: EPF members need to apply individually or jointly through housing society in the specific format to the PF Commissioner.
Step 2: EPF Commissioner needs to issue the certificate that EPF contribution is made by the member during the last 3 months. After that, PF subscriber may take out the print out of their passbook from the official EPFO’s website in order to submit it to the housing society/banks.
Step 3: Always try to use a composite claim form while making a withdrawal from your PF account. You may also use Aadhaar based EPF Composite Claim Form if your aadhaar number is seeded else you may use Non-Aadhaar Claim Form.
Also Read: Benefits of Employee Provident Fund (EPF)
Savings put in your PF account comes handy when your looking to purchase a dream house of your own when you do not have enough cash in your hands to refinance your purchase. Any EPF subscriber may withdraw 90% of savings from his EPF account to purchase a new house or to build it. You need to have a maximum accumulation of Rs. 20,000 to be eligible to withdraw from your PF account.