The Employees’ Provident Fund Organisation (EPFO) has amended the scheme to allow its subscribers to withdraw up to 90% from their EPF accounts for purchasing a house or flat, construction of a house, acquisition of the site and even payment of Equated Monthly Instalments (EMIs), says a news report.
Over four crore individuals who have EPF accounts are likely to benefit, provided they fulfill certain conditions, by the addition of a new paragraph – 68 BD – to the EPF Scheme, 1952, that enables account holders to use their account funds for down payments to buy homes, and pay EMIs.
The provision had been in the making for quite some time, as the Labour Ministry had notified the same recently. The EFPO is controlled and managed by the Labour Ministry. Under the new provision, “an EPF subscriber who is a member of a co-operative or housing society, with at least 10 members, can withdraw up to 90 percent from the fund for the purchase of a dwelling house or flat or construction of a dwelling house and acquisition of site” says the report. Furthermore, it also says that “monthly installments for repayment of any outstanding payment or interest can also be paid from the account to the government, housing agency, primary lending agency and banks concerned.”
The conditions that one must fulfill to be qualified to withdraw the amount for the said purposes are as follows: the subscriber must have contributed to the fund for at least three years; the facility will be made available only once to the subscriber during his/her lifetime; the subscriber, along with their subscriber spouse, must have at least Rs. 20,000 in their accounts.
“The present EPF scheme is not being properly utilized to withdraw money for constructing flats or buying land,” EPFO Central Provident Fund Commissioner V.P. Joy was quoted saying a few months back. The addition of this provision aims to facilitate funds towards better utilization for housing purposes.