EPFO Rule Changes: 90% PF Withdrawal For First-Time Homebuyers And Others

As per the changes introduced under Para 68-BD of the EPF Scheme, 1952, the EPF members can withdraw up to 90% of their accumulated corpus for buying a new house.

The rules apply to home purchase, construction, or EMI payment of a residential property. (Photo: Unsplash)

The Employees’ Provident Fund Organisation (EPFO) has recently announced some major changes to existing rules on EPF advance withdrawals, offering enhanced benefits to members, particularly first-time home buyers. The Employees’ Provident Fund (EPF) subscribers will now be able to withdraw 90% of their balance for buying their first homes.

For this EPF advance withdrawal, the salaried employees should have completed three years of continuous service.

The rules apply to home purchase, construction, or EMI payment of a residential property. Earlier, the rules to withdraw partial PF balance were limited to encourage subscribers to hold onto these savings for long-term benefits. However, the changes introduced under Para 68-BD of the EPF Scheme, 1952, are aimed at simplifying access to funds.

The EPFO is tasked with handling the PF scheme for the salaried employees in the private sector. Under the EPF scheme, an employee contributes 12% of the basic salary and dearness allowance every month, while the employer also contributes an equal amount. Out of the employers’ contribution, 8.33% goes to the Employee Pension Scheme (EPS) and the remaining 3.67% to the EPF. 

The interest rate for the EPF scheme has currently been pegged at 8.25% per annum.

Also Read: How To Use EPFO Grievance Portal: A Step-By-Step Guide To Raising A Complaint

EPF Withdrawal Rules For Housing Needs

As per the changes introduced under Para 68-BD of the EPF Scheme, 1952, the EPF members can withdraw up to 90% of their accumulated corpus for housing-related needs. This includes expenses such as down payment, construction of a new house, or repayment of home loan EMIs. Earlier, members had to complete five years of continuous service to be eligible for such withdrawals. 

However, under the updated rule, members can now initiate the withdrawal after just three years from the date of opening their EPF account. It’s important to note that the members can use this PF advance withdrawal option only once during their lifetime.

EPFO Raises Auto-settlement Limit

Another key reform announced by EPFO is the enhanced auto-settlement limit for advance claims to Rs 5 lakhs. Earlier, the auto-settlement facility was available for withdrawals up to Rs 1 lakh. This move will enable faster fund disbursal within 72 hours, helping members access their money easily.

The move is part of the EPFO’s efforts to simplify the withdrawal process for the PF corpus. Members have been raising concerns about growing inconvenience surrounding EPFO withdrawal rules and claim-related difficulties. Meanwhile, the EPFO has been focusing on improving its services, including potentially offering options such as ATM-style withdrawals for the members, under its soon-to-be-launched EPFO 3.0 initiative.

Also Read: How To Check Your EPF Balance And Interest Credited In FY25

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