To Finance A New Home In 2023, Use Your EPF
EmployeeProvidentFundOrganization,orEPFO,isalegallyrecognizedgovernment agencyrunbytheMinistryofLaborandEmployment.Themanagementand oversightoftheProvidentFund(PF)inIndiaistheresponsibilityofEPFO(EPFO Login).TheEmployeeProvidentFund(EPF)&EPFOMemberLoginrequirea UniversalAccountNumber(UAN),whichisaspecialidentificationcodeusedfor both.It'sinterestingtonotethatPFfundscanbeusedforbothhouseloan repaymentandhomepurchase.AnEPFOMembermayusethePFamountfor dwellingbuildingandlandpurchase,subjecttocertainrestrictions.
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TheUANcanbeusedtologintotheEPFO(EPFOUANLogin).AUANlogincanalso beusedbyanEPFOmembertoviewtheUANPassbookonline(EPFOMember login).SinceUANisrequiredtoaccessEPFOMemberdata,anEPFOMembercan obtaintheUANpassbookbylogginginasanEPFOMember(Epfologin).
Current update
InFebruary2023,theEmployees'ProvidentFundOrganization(EPFO)openedthe doorforitsmemberstoincreasetheirpensioncontributionsdependingontheir realsalariesratherthanthepreviouslymandatedcap.Existingbeneficiariesand thosewhoretiredonSeptember1,2014,willbeaffectedbythis.Itindicatesthatan employerandemployeemayenrolljointlyandasktheretirementfundbodyto withhold8.33%ofthehighermonthlybasicwageforpensionpurposes,raisingthe workers'pensionsasaresult.
Let'slookattheinformationonUANEPFOandEPFOLogin(Epfologin).
Describe UAN
TheEmployeeProvidentFundschemecoverssalariedemployees,whoaregivena UAN,oruniversalaccountnumber,whichisaspecialnumber.TheEPFOpassbook, PFcontributioninformation,andEPFaccountbalancecheckareallaccessible throughtheUAN.Becausetoitsuniqueness,UANcanbetransferredifaperson changesjob.LinkingtheUANandtheemployee'sAADHARnumberisnecessaryfor theemployertobeabletomakecontributionstothePFaccount.
Withdrawing PF to purchase a new home
TheEmployeeProvidentFundisaretirementfundtowhichtheEmployerand salariedEPFOMemberseachcontributeupto12percentoftheEPFOMember's basicincome.AlthoughtheEPFmoney'smainpurposeistogivetheEPFOMembera sustainingsumwhentheyretire,thereisawaytowithdrawthismoneyforbuilding orbuyingahome.TheEPFOMembermayevenutilisethismoneytopaybackhome loans.TheEPFOMembercannot,however,taketheentirebalancefromthePF accounttopayforhousing.Thefacilityissubjecttoseveralrestrictions.The followingrequirementsapply:
TheamountoftheaccumulatedPFwithdrawal,ifusedtopurchaseaready-tomove-inhome,islimitedto36months'worthoftheemployee'sBasicSalaryplus theDearnessAllowance(DA),orthepriceofthechosenproperty,whicheveris lesser.
ThemaximumamountofPFthatcanbewithdrawnbyanEPFOmemberinorderto buyaplotorlandparcelisequalto24monthsofthemember'sbasicsalarywithDA ortheplot'sprice,whicheverislower.Forinstance,thecostoftheplotisRs3lakh andtheaccruedPFandDAover36monthsisRs2lakh.TheEPFOMemberwillbe limitedtowithdrawingnomorethanRs2lakhinthisscenario.
EPFO Member Withdraws PF for Home Loan Repayment
AsalariedEPFOmemberwithaPFaccountisalsoqualifiedtowithdrawPFfunds forhomeloanrepaymentinadditiontothecriteriaspecifiedabove.However,the EPFOMembermusthavebeenasalariedworkerandPFcontributorforatleastten yearsinordertobeeligibleforthisbenefit.
Additionally,ifyouchoosetopaybackthemortgagewithaPFwithdrawal,the withdrawalisonlyallowedtoequal36months'worthoftheEPFOmember'sbasic salaryplusDearnessAllowance(DA).TheEPFOMembermustobtainahouseloan fromabank,non-bankingfinancecompany,orotherrecognizedlenderinorderto obtainthismoney.ThisfacilitywillnotbeavailabletotheEPFOMemberiftheloan isprivatelyobtainedfromanunregisteredorganisation.
Withdrawal of PF for construction of a house
TheEPFmoneycanbeusedbytheEPFOMembertobuildadwellinginadditionto buyingaparceloflandorahouse.TheEPFOMembermust,however,beapartofa recognizedhousingsocietyoraregisteredsocietywithatleast10membersinorder tousethisfunction.Incertainsituations,thePFwithdrawalisequaltothelesserof 90percentofthePFamountandthecostofbuildingtheproperty.Withinsix monthsoftheEPFOMember'sPFmoneywithdrawaldate,workonthehousemust begin.Thebuildingprojectmustbefinishedwithinayearofthelastinstalment withdrawal.
Removal of PF for Home Renovation
AregisteredEPFOmembermayusethePFwithdrawaloption,amongotherthings, topayforhomeimprovementsortherepaymentofanexistingmortgage.The EmployeeProvidentFundOrganization,orEPFO,hasaninterestingpolicythat allowsregisteredmemberstowithdrawPFforhomeimprovements.
IfanEPFOmember,hisorherspouse,orthetwoofthemjointlyownahome,they maybeeligibleforaPFwithdrawaltopayfortherenovations,alterations,or additions.ItshouldbeemphasizedthatthePFwithdrawalinthissituationcanonly beusedafterthehousehasbeenbuiltforfiveyears.ForthebenefitoftheEPFO members,EPFOhasmadeitplainthatremodelingthesamehomeforwhichaPF withdrawalhasbeenmadeisnotrequired.Theotherhomecanalsoberenovated byanEPFOmember.Also,eveniftheEPFOMemberhasn'talreadywithdrawnPF fundsforhomeconstructionoracquisition,theymaybeusedfortherenovation.
What are the steps for PF withdrawal? (Online PF Withdrawal)
ThePFwithdrawalcanbemadeforavarietyofreasons,includingbuildingahouse, payingformedicalexpenses,andmore.Bothonline&offlinewithdrawaloptionsare availableforPF.
Offline Process for Withdrawing PF (How to Withdraw PF)
TherearetwoformsyoucanusetoaccessyourPFbalanceoffline:
FormofCompositeClaim(Aadhar)
FormofCompositeClaim(NonAadhar)
WithaCompositeClaimForm,withdrawyourPF(Aadhar)
IfyourUANnumberisactivatedandyouhaveseededtheUANportalwithyour Aadharnumber&primarybankinformation.Withoutreceivinganyattestation fromyouremployer,completethisformanddeliverittotheappropriateEPFO office.
WithaCompositeClaimForm,withdrawyourPF(NonAadhar)
YoucanusetheCompositeFormiftheUANportalisnotconnectedtoyourAadhar number&bankinformation(NonAadhar).Thisformshouldbefilledoutand deliveredtotheappropriatejurisdictionalEPFOoffice.
Itshouldbementionedthatunderthepreviousadministration,manydocuments andcertificateswereneededinordertowithdrawPFbalance.However,inorderto streamlinethePFwithdrawalprocedure,thegovernmenteliminatedtheneedfor thesubmissionofseveralpapersandinsteaddevelopedasystemforEPFemployees tocertifythemselves.
Online PF Withdrawal Process
UsershavetheoptionofapplyingonlineforPFwithdrawalinadditiontotheoffline procedure.Thefollowingrequirementsmustbesatisfiedbytheuserbefore submittinganonlineapplicationforPFwithdrawal.
ThemobilenumberassociatedwiththeUniversalAccountNumber(UAN) mustalsobeactivated.
TheUANneedstobeconnectedtotheKYC,suchasAadhar,PAN,etc.
How do I apply for a PF withdrawal online?
ThisishowtoapplyforaPFwithdrawalonlineinsteps.
Step 1: VisittheUANLoginportal.
Step 2: EntertheCaptchaCodeafterlogginginwithyourUANandpassword.
Step 3: SelecttheManagetabanddeterminewhetherornotyourKYC(KnowYour Customer)hasbeenvalidated.
Step 4: AftertheKYChasbeenverified,clickthe"OnlineServices"pageandchoose "Claim"(Form-31,19&10C).
Step 5: EnteryourKYCinformation,youraccountnumber,andclick"Verify"onthe followingscreen.
Step 6: ChooseYestoAccepttheAgreementandContinue.
Step 7: Toproceed,select"ProceedforOnlineClaim".
Step 8: Undertheheading"IwanttoApplyfor,"ontheclaimform,choosethesort ofclaimyouneed,suchasafullsettlementorapartialwithdrawal.
Step 9: Choose"PFAdvanceForm31"fromthemenu.
Step 10: ClicktheCertificateandfinishsubmittingtheform.Thescanned documentsmayberequestedforupload.Iftheemployerhasapprovedthe application,thefundswillbecreditedtoyouraccountwithin15to20days.
Should an EPFO member take a PF withdrawal for housing?
ItmustbeemphasizedthattheamountofaPFwithdrawalthatcanbeusedto renovate,upgrade,oraddontoanexistinghomeislimitedto12monthsofbasicpay andDA.Thisisdependentontherenovationcosts.ItmustbeemphasizedthatEPFo membersareonlypermittedtowithdrawPFfundsinalifetimeforhousing-related purposes.AlthoughthereisaPFwithdrawaltoolavailableforhousing-related purposes,itiswisetoavoidwithdrawingfundssetasideforretirementbenefits.
AsalariedEPFOmemberwhocontributestoPFisrequiredtohavetheirUAN number.WhenanEPFOmemberchangesjobsorwantstowithdrawmoneyfrom theirPFaccount,forexample,theycanusetheirspecialUANnumber.Wouldyou liketoknowwhereanEPFOmembercanlocatetheirUANnumber?Continue reading.
How to apply for a home loan using my EPF funds?
EPFOmembersarepermittedtousethemoneythathasaccumulatedintheirPF accounttopayofftheirhomeloan.InordertorequestthewithdrawalofEPFfunds, anEPFOMembermusttaketheactionsoutlinedabove.
AnEPFOmembermaysubmitawithdrawalrequesttotheEPFCommissioner viatheirhousingsociety.Theapplicationmustfollowtheguidelinesoutlined inAnnexure1intheappropriateformat.
TheEPFCommissionerproducesacertificatethatdetailsthemonthly contributionmadebytheEPFOmemberinordertosubmitawithdrawal request.
TheEPFOpassbookmayalsobeprintedandusedasproofofcontributionby EPFOmembers.
ItshouldbementionedthattheEPFOdonatesmoneytotheorganisation directly(privateorPublic).
EPFOmemberscanchoosetowithdrawtheirPFinalumppaymentor throughEMIs.
What paperwork is needed for PF withdrawal?
ThefollowingdocumentsaremandatorytohaveonhandwhenanEPFOmember wantstowithdrawtheirPF.
Primarily,aUniversalAccountNumber,orUAN,isneeded.TheUANcanbe foundonthepassbookofanEPFOmemberoritcanberequestedfromthe employer.
BankaccountinformationfortheEPFOmember,similartoapassbook.Both theEPFOmemberaccountandthebankaccountmusthavethesameEPFO membername.
MoneycannotbemovedtoathirdpartywhiletheEPFOmemberisstillalive, thusthebankaccountmustbeintheirname.
Identityproof&EPFOmemberaccountmusthavethesamepersonal informationabouttheEPFOmember.
The EPF conclusion
Inconclusion,theEPFOLogin(EPFOMemberLogin)enablesuserstouseUANto checktheirPFbalance.TheUANloginenablesausertoaccessthedashboardonline andmakeadvantageoffeatureslikecheckingtheirEPFOpassbook,updatingtheir contactinformation,andmonitoringtheprogressoftheirclaims.TheEPFOweb serviceshavebeenoptimizedthankstotheUANlogin(EPFOMemberLogin).
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