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The Indian government recently revised the Employees’ Provident Fund (EPF) withdrawal rules, making it easier for salaried individuals who wish to buy a house to access funds.
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The newly introduced Para 68-BD of the EPF Scheme, 1952, now allows members to withdraw up to 90 per cent of their lying EPF corpus for housing needs, which includes down payment, construction or EMIs.
The withdrawal can be initiated after completion of three years from the date of account opening, significantly reducing from the previous five-year requirement.
Earlier, the EPF withdrawal for housing needs was calculated depending upon 36 months of total contribution from the employer and the employee, plus the interest amount, whichever was less. The previous rule also restricted members enrolled in any housing scheme from withdrawing funds.
The revised changes aim to relax these rules, ease down payment barriers, unlock dormant savings, and provide more flexibility for EPFO members to buy a house. However, the withdrawal facility is limited to once in a lifetime for a member.
Apart from the housing, there are other significant changes made to simplify and streamline PF withdrawal.
These include:
Starting June 2025, the EPFO members will be able to instantly withdraw up to Rs 1 lakh via UPI and ATM for emergency needs.
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The automatic claim settlement threshold has been increased from Rs 1 lakh to Rs 5 lakh for faster processing.
- Claim process simplified:
With an aim to streamline the claim process, the verification parameters have been reduced from 27 to 18. In 95 per cent of the cases, claims are being settled in 3-4 days.
- Easier withdrawals for education, medical and marriage:
The process of withdrawing PF for life needs has also been simplified, providing liquidity for essential expenses.
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