Home Loan EPF Rules: You are allowed to withdraw money from the EPF account to buy a house, but before withdrawing it, you must definitely assess its advantages and disadvantages.
Â
Home Loan EPF Rules: Everyone has a dream to have a house of his own and for this they raise capital throughout their life or take a loan from any banks for this. This is the best time to fulfill this dream by taking loans from banks as home loan rates are at historically low levels. However, when you take a loan from the bank, you have to pay some amount as down payment. For this, some people take help from their friends and relatives, while some people arrange it from the Provident Fund. Apart from this, withdrawal is also done from the EPF account to clear the home loan dues. You are allowed to withdraw money from the EPF account to buy a house, but before withdrawing it, you must definitely assess its advantages and disadvantages.
Withdraw money from EPF account only in these circumstances
Â
The advantage of repaying the outstanding home loan or down payment is that it can be beneficial to use it for the property instead of keeping the money in the PF account if the property value rises in the future. However, if you are getting more returns than FD on EPF account, then instead of this account, you should withdraw money from other investment schemes which have lower interest rate and pay the outstanding home loan or downpayment.
These are the rules related to withdrawing money from EPF account for home
- EPF amount can be used to pay home loan dues. However, it is necessary that these loans should be taken from bodies like State Government, Registered Co-operative Society, State Housing Board, National Bank, Government Financial Institution, Municipal Corporation or DDA. Up to 90 percent of the amount can be withdrawn from the PF account, but at least 10 years of service of the employee is necessary. Apart from this, the fund in the PF account of the employee (or spouse) along with interest should be more than Rs 20 thousand.
- Under the EPF Scheme 1952, if you want to buy a plot to build a house, then you can withdraw the basic salary and dearness allowance for 24 months or the amount up to the actual cost of the plot. In the case of ready-to-move-in houses, ie ready-to-move-in houses, 36 months of basic salary and dearness allowance or 90 percent of the total deposit can be withdrawn from the PF account. However, to use this facility, it is necessary that the job for at least five years has been completed.
- 12 times the salary can be withdrawn for the repair of the house, but at least 5 years of service is necessary. Under this, it is necessary that the property should be in the name of the employee or his wife or both and any construction work has taken place in the house at least 5 years ago.
