If you are a salaried employee contributing to EPF, your dream of having your own house may come true! Having a good house in a good locality is everyone’s dream. There are various sources like friends and family whom you can approach for funds for the purchase of your new house. Moreover, salaried people who have been making contributions to the provident fund can have an additional avenue to get fund for their new home. An individual can withdraw money from his/her provident account, after passing through certain conditions or limits.
The withdrawal made from the Provident Fund account can be used to serve various purposes like purchase of a plot, a ready to move-in flat or can be put in new construction of a house. The scheme also allows the individual to use the EPF Balance to repay their Home Loan.
EPF for Purchase of Plot, House or Construction of House
The primary condition for withdrawal from EPF Account for the purchase of construction of a new house is that the employee must have completed at least 5 years of contribution to his provident fund. The amount can be withdrawn by either your wife or by yourself or jointly.
The suitable amount can vary according to the purpose of withdrawal. If the individual is looking forward to withdraw the amount to purchase a plot, the maximum cap is limited to 24 months basic salary and dearness allowance.
In the second case, if you are looking to withdraw the amount from your EPF account for the construction of new house, then the maximum cap for withdrawal exceeds to 36 Months of your basic salary and dearness allowance (DA) combined. The construction of your house should begin within 6 months of the withdrawal of the amount and should be completed within the period of 12 months from the last installment.
The third condition for which you can withdraw the amount from your EPF account is for the purchase of ready-to-move-in house. Also here, the deal for the purchase of house should be sealed within 6 months of the withdrawal of the amount.
It is eminent to note that the withdrawals can be made in installments suiting the purpose and need of the individual. Also, the house property can be purchased individually or jointly with the spouse only.