There are various demands from our conscience or even loved ones. We make big deals in our whole lifetime. The purchase of a site or flat is one of such a huge investment for which we need proper investigation. It requires huge capital as well. We can go for loans from banks or borrow from our acquaintance. To make the process easier, EPFO has proposed the withdrawal for the purchase of the site or flat. In this article, we’ll look forward to how you can easily go for the EPF withdrawal for purchasing a site or flat.
Why Should You Go For EPF Withdrawal For Purchasing A Site Or Flat?
Employee’s Provident Fund(EPF) is a part of your basic wage that gets deducted each month to promote your retirement saving habits. The amount contributed is based on a fixed rate. Employees earn interest on their EPF balance.
One can withdraw from EPF account balance, subject to certain conditions and within certain limits. 75% of the EPF balance can get withdrawn if a person remains unemployed for one month. Complete 100% of EPF balance withdrawal gets allowed if you remain jobless for more than 2 months. Partial withdrawal is also allowed under Employee’s Provident Fund scheme,1952. Under it, we’ve EPF withdrawal for purchasing of a site or plot.
The EPF Scheme is a part of the government agenda of housing for all. The Pradhan Mantri Awas Yojna also provides up to 2.2 lakh rupees interest subsidy. Yet, it’s provided to the people with annual income less than a specified amount. Added to that, they must not own any house in the name of any family member anywhere in the country.
Let’s know more about why should you go for EPF withdrawal for purchasing a site or plot-
Features Under EPF Withdrawal For Purchasing A Site Or Flat
i. The withdrawal process you filed for is delivered to you may or may not be in direct form. It may get delivered to the government agency or your bank account or your flat society head.
ii. In case you cancel the deal of buying the property, the amount you withdrew, get refunded to your EPF account. This procedure gets completed within about 15 days.
iii. In case you got the fund from ‘total expenditure of the construction,’ there’s another rule for it. You’ve to return it to your account within a max of 30 days.
iv. Under this cause, you can get either in one or more than one installment.
v. You won’t get permitted for the withdrawal procedure if the property is in the name of anyone else. That is, it’s mandatory for you or your wife or both to be the legal owner of the property. Otherwise, you would get expelled from the request of withdrawal made.
Eligibility Criteria Of The EPF Withdrawal
According to the latest norms of the PF withdrawal, you must meet the following criteria-
a. You must be an active member of the EPFO for a min of five years.
b. The total amount in your PF account(or together with your wife) must be a minimum of Rs. 20,000.
c. You can avail of this opportunity only once. It means you can go for the EPF withdrawal for the purchase of a plot or flat once in your lifetime.
Rules And Regulations Of EPF Withdrawal For Purchasing A Site Or Flat
There are some protocols that you must abide by to withdraw your EPF money for purchasing of a plot or site-
A. In Case Of Purchase Of Plot-
i. You must have rendered at least 3 service years to your company or organization.
ii. Your share must be more than 1000 rupees as a contribution to your fund.
iii. The limit of money that can get withdrawn is 90% of your total amount in your PF account.
iv. Withdrawal is not allowed if the property is to get purchased jointly with anyone, except the spouse. In this case, both, i.e., you and your wife must be an active subscriber of EPFO.
v. The investigation and survey regarding the plot must get over within a max of 6 months.
vi. Withdrawal can be made in one or more installments.
B. In Case Of Construction Or Purchase Of House/Flat-
i. You must bear at least three years of subscription in EPFO.
ii. Your share must be more than 1000 rupees as a contribution to your fund.
iii. The limit of money that can be withdrawn is 90% of your total amount in your PF account.
iv. Withdrawal is not allowed if the construction of the house is to be on-site owned jointly with anyone, except your wife. In this case, both must be a subscriber of EPFO.
v. Withdrawal can be made in one or more installments.
vi. In case you’re withdrawing for the building of your house, you must begin it within a max of 6 months of withdrawal of the first installment. Then, you must get it completed within 12 months of withdrawal of the final installment.
vii. You have to be a member of the co-operative or housing society. Apart from that, this society must bear at least 10 members.
viii. You can also make monthly premiums for your PF balance against any outstanding loan. It can be in your name or your spouse. However, to name it in your wife’s name, it’s required for her to be an EPFO member as well.
ix. The contributions made to EPFA over the past 3 months are considered by banks. Bank uses it to calculate EMI through your EPFA.
Documents Required For EPF Withdrawal
The form for this cause is Form-31. Thus, first, you need to fill the form and submit it. You can do it either online or offline. The online mode is relatively easier, contains less paperwork, and requires much lesser time than the offline method. In the online mode, you can get your amounts transferred within a max of 7 days. On the other hand, the offline procedure takes a longer duration.
With all that, you’ve to tie-up a declaration form.
Amount You Can Avail From EPF Withdrawal
Since the article involves the purchase of a site or a flat, it has two sub-divisions. So, the amount you can avail of depends on which division you’re in.
1. If you’re purchasing a site for building your house, you’ll get an amount equal to-
Your 2- year salary, including the Dearness Allowed. For example, you earn Rs. 50,000 per month. Counting up to a total of it in 24 months yields an amount of Rs. 12 lakh.
2. If you’re withdrawing for the construction of your house, you’ll get an amount equal to-
Your 3-year salary added up with the DA. For example, you earn Rs. 60,000 per month. Counting up to a total of it in 36 months yields an amount of Rs. 21,60,000.
In this criteria, you’ll get an amount that is less than the rest. These get judged from several other bases as well. These are mentioned below-
Total expenditure of the construction. For this, you must make a rough calculation of the total processes and the cost under each. This can either yield up an amount greater than the required or less.
You and your manager’s share to your EPF fund with the accrued interest to it.
Thus, the three options get into the EPFO officer’s consideration. Finally, you get an amount that counts to be the least.
The mode of remittance may be in the form of-
- Physical cash
- Postal order
- Directly to your bank account
Frequently Asked Questions
1. How can I withdraw my PF for buying a flat without my employer’s assistance?
Earlier, dealing with your employer for these things was a matter of hesitation for a few employees. Especially if your employer is a grumpy one, that posed a great problem to your procedure. They would make excuses or make you lick their shoes to get your work done. Due to this, the EPFO has clarified that you need not please your grumpy employer all the time. There can be other methods that can add to your ease. Thus, as per the latest improvisation, you can carry out the procedure without the aid of your boss. Let’s see how-
i. Visit your UAN portal by logging in with your requisite ID and password. Check if your Aadhar card is updated. If not, then update it.
ii. Recheck it with the information on your employer’s list. Then tie-up your Aadhar number with your UAN portal.
iii. There you’ll find an online EPF withdrawal handout. Provide your relevant details to it.
iv. Finally provide the details in the hands of the EPFO officer of your area. After a few days, you can get the amount.
2. Can I withdraw PF for buying land?
Yes, certainly you can go for an EPF withdrawal for buying a plot or a site. However, to avail of it, you must satisfy certain regulations. You must have rendered at least 5 years of your service to your organization. The amount you wish to withdraw must be either less or the exact amount of the plot. Yet, if the amount in your account is less than the amount required. You’ll get the lesser amount.
For instance, if the land costs Rs. 15 lakh and the amount you’ve in your bank is Rs. 12 lakh. You’ll get the lesser amount, i.e., Rs. 12 lakh.
3. Is employer approval required for PF withdrawal?
As I’ve already mentioned above, it may or may not be a requisite factor in your withdrawal process. Some good employers go in good terms with their employees. However, for the grumpy employers, the improvisation was enforced. That is, you need not impress them all the time to get your work done. There are other ways out there to serve you.
Thus, if your employer agrees to get your work done in a short period, go for him. Otherwise, politely look for the other way out, as mentioned above.
4. How many days it will take to withdraw EPF online?
The online procedure involves no paperwork, and only the laptop or computer clicks. Okay, you can take a few print outs even. Yet, the tediousness in the offline method is much more than online. So, in the online procedure, your work can get done within a max of about 2-3 days. In the worst case, it takes a week.
At the other hand, in the offline method, it takes about 15-20 days. So, if you still didn’t get your required amount even after a week or so, file a complaint. You can get a talk with the assigned EPFO officer regarding the delay caused.
5. Can EPF be drawn anytime?
Yes, you’re free to withdraw EPF anytime. However, just like everything else, there lie certain regulations to it as well. You must satisfy certain specific terms and conditions to avail of it. The most important regulation is the retirement period or age. The minimum age that you’re now must be at least 54 or more. Apart from that, you must have served for about 10 years or more in the same organization.
In the other cases, you’ve to take permission from the EPFO officer whether you’ll be able to withdraw or not.
6. Can I take a loan against PF?
As I’ve already said, when all the gates are closed, EPF is the only gate that opens. Thus, in this, the loan also profound. That is, you can avail of the loan facilities from your EPF account. However, there lies certain terms and conditions for it. You can file for an EPF loan only for constructing or buying a house.
Since the interest rate varies with time, it can change after a few months. However, in the present scenario, it’s stuck at 8.5%. Although you’re free to withdraw in the times of need. Yet, you’re advised not to go for EPF in the first hand itself. Since it deals with your old age financial aids, you must preserve a sound lumpsum for that.
Now that you’ve gone through this article, you must know how to deal with things better. I hope I could enlighten your thoughts with my words on EPF withdrawal for purchasing a site or flat. Cheers!