EPF changed certain rules in relation to EPF withdrawal for house, flat or construction of property. These rules will come into effect from 12th April 2017. These changes are called as Provident Funds (Fourth Amendment) Scheme, 2017.
I already wrote a detailed post on EPF partial withdrawal rules. Now the new paragraph is inserted along with those changes as 68BD. This paragraph will now supersede of whatever written in earlier rules.
Let us see these new rules related to EPF withdrawal for house, flat or construction of property. If you are planning to acquire or construct a house or flat or a site, then you can apply for EPF withdrawal for house, flat or construction of property. The two conditions are as below.
# If you are interested in purchasing or constructing the house or flat or a site.
# Otherwise, you must be a member of a co-cooperative society or a society registered for housing purpose under any law for the time being in force and such society has at least 10 members of the EPF.
Who can apply for EPF withdrawal for house, flat or construction of property?
# If you are the member of EPF for more than 3 years (earlier it was 5 years).
# EPF withdrawal for house, flat or construction of property is allowed only once. Hence, if you already availed this facility, then you are not allowed to withdraw again. Earlier also the rule was same.
# Your accumulated EPF balance must be more than Rs.20,000. If your spouse is also the EPF member, then the combined balance will be considered for the eligibility.
EPF withdrawal for house, flat or construction of property – How much you can withdraw?
You can withdraw up to 90% of EPF Balance (Employee share and interest on that+Employer share and interest on that) or the cost of the construction of property whichever is less.
For calculation of the EPF balance eligibility for EPF withdrawal for house, flat or construction of property, employee’s contribution and interest on that along with employer contribution and interest on that is considered.
EPFO will not transfer the money to you, instead to the Cooperative society, Central Government, a State Government, or any Housing Agency under any Housing Scheme or any promoter or builders as the case may be, in one or more than one installments as employee authorize the EPFO.
If the amount of such withdrawal is more than the actual cost or expenses of acquiring the property, then you have to refund such excess amount to EPFO in lump sum within 30 days from the date of finalization of the purchase, completion of the property, or necessary additions or alterations to a house or flat.
If you have failed to utilize the withdrawal for acquiring the property, then you must refund the whole amount to EPFO within 15 days from the date of such non-allotment.
Which form to use for EPF withdrawal for house, flat or construction of property?
You can use the C0mposite Claim Form for EPF withdrawal for house, flat or construction of property. There are two types of forms. One is Aadhaar complied and another Non-Aadhaar complied. Use the forms as the case may be. The process is explained in below image.
You noticed from above image that for EPF withdrawal for house, flat or construction of property, you can submit the form through your employer or can directly submit the same to regional EPFO.
Along with the EPF Composite Claim Form, you have to request EPFO Commissioner to issue the certificate in relation to the last 3 months EPF contribution and also the balance as of today. The form for the same can be downloaded from “Download Application to obtain a certificate of EPF withdrawal for the house, flat or construction of property“.
How to use EPF to repay your home loan EMI?
Do you know that you can use your EPF Balance to repay your monthly home loan EMI? Yes, you can use it to repay the home loan EMI for the accumulated EPF corpus.
You can use EPF balance to repay your home loan EMI either fully or partly as per your wish. For that, you have to instruct the EPFO. EPFO will transfer the money to your bank monthly as long as there is sufficient EPF balance in your account. This transfer will be active as long as you are the member of EPF. Once your membership of EPF ceases, then EPFO will stop to repay the loan.
Download the form to authorize EPF for repayment of Home Loan EMI.
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