The Employees' Provident Fund Organisation (EPFO) has brought significant relief to salaried individuals by implementing major changes to its regulations. EPFO members can now utilize the funds accumulated in their PF accounts to purchase homes through easier methods.
The amendment made under Para 68-BD of the EPF Scheme 1952 is proving to be quite beneficial for prospective homebuyers.
Earlier, withdrawal of PF funds was permitted after 5 years. However, according to the new rules, members can now withdraw money for housing purposes just 3 years after opening their account. This means the dream of owning a home can now be realized sooner.
Withdrawal up to 90% allowed
The most significant change introduced by the EPFO is the limit on withdrawals. Members can now withdraw up to 90% of the amount accumulated in their PF accounts. This withdrawal can be used to purchase a home, make a down payment, or pay EMIs on a home loan.
Previously, such withdrawals were only possible after 5 years of account opening, and the process was quite lengthy. However, the benefit can now be availed after just 3 years, making homeownership possible for many.
This facility available only once
The EPFO has also clarified that this PF withdrawal facility for purchasing a home will be provided to a member only once in their lifetime. This implies that once you have availed of this facility, you will not be able to withdraw money from your PF for this purpose again.
PF claim process now easier
The EPFO has not only relaxed the withdrawal rules but has also simplified the claim process. Verification of 27 different documents, as required earlier for PF withdrawals, is no longer necessary. The process will now be based on only 18 parameters. This will save time and also bring transparency to the process.
In addition, the EPFO has also increased the auto-settlement limit. Previously, only claims up to ₹1 lakh were settled automatically, but now this limit has been increased to ₹5 lakh. This means that most minor claims will be settled directly without any delay.
Lakhs of new members joining every month
According to EPFO data, there are more than 7.5 crore active members across the country, and approximately 10 to 12 lakh new members are joining every month. The organization is continuously expanding its network and services through its 147 regional offices.
This update will be quite beneficial for these new members as they will not have to wait long to utilize their PF money.
95% of claims settled in 3-4 days
The EPFO claims that approximately 95% of claims are now being settled within 3 to 4 days. This is a significantly faster pace than before, when the claim process used to take weeks.
This initiative by the EPFO will directly impact the lakhs of employees who have been struggling to withdraw their PF money for a long time. Now, keeping their convenience in mind, the process has been made digital and automated.
Real estate market to benefit as well
The impact of this change by the EPFO will not only be on employees but also on the real estate sector. Experts say that this will increase the demand for homes. When people can make down payments from their PF, they will be quicker to make the decision to buy a home, which will boost the market.
This decision will particularly benefit small towns and middle-class families, where housing prices are lower compared to metro cities and PF withdrawals can fulfill a major need.
