Employee Provident Fund Organization or EPFO is a small savings scheme initiated by the government for an employee to save a fraction of his or her salary every month for a future event after which he or she is not able to work anymore, which also includes retirement. So, if a need occurs, EPFO will allow the employees to withdraw partial or advance funds from their EPFO account with a simple claim. But the government body only allows it under certain circumstances including medical needs, Marriage, Construction of a house, educational needs, and even Repaying the existing home loan.
PF Withdrawal Process for Home Loan Repayment
Presently, home loan interest rates are pretty much elevated as a result of RBI increasing repo rates. Hence, for both new and existing customers, the banks have hiked their interest rates on both borrowings and deposits. So, the solution for the borrowers’ issue on how to repay the home loans amid roof-touching interest rates, is to repay the amount in full or part with accumulated money in their PF accounts.
Furthermore, according to Section 68BB of the EPF scheme, EPFO allows members to withdraw their PF amount to repay their home loans. However, the house must be registered under the PF member’s name, either individually or jointly.
Here are the three points to note:
- Members can withdraw the PF amount for a home loan if they have contributed for at least 10 years.
- They must have been serving consistently for at least five years.
- The PF amount withdrawn will not attract taxation.
Here’s Your Explainer Guide to Withdrawing PF Amount for Home Loan Repayment:
- First, log in to the EPFO e-SEVA portal.
- Complete the information filing process.
- Enter your UAN, password and captcha code.
- Navigate to and open the ‘Online Services section.
- Next, enter your bank details correctly.
- Read the terms and conditions properly.
- Provide the reason for your PF withdrawal request.
- Now, enter asked details and upload the documents asked for.
- Confirm the terms and conditions and verify yourself via the OTP process.
- Your application will then be accepted and a confirmation message will be sent to your number.