Understanding Provident Fund

The Provident Fund is a compulsory retirement scheme managed by the Employees Provident Fund Organisation (EPFO). The employee and the employer contribute a fixed monthly amount to the employee’s PF account. This amount aggregates into a lumpsum amount that is usually withdrawn on retirement. However, employees can also withdraw their PF to fund house purchases or construction.

PF Withdrawal for a Home Purchase in 2023: Conditions

Before diving into the withdrawal process, knowing the conditions governing PF withdrawal for home buying in 2023 is essential. These conditions include

Withdrawal Limit: PF withdrawal for home purchase is limited to 90% of the Employee Provident Fund (EPF) balance.
Service Period: You must have completed at least five years of service to be eligible for PF withdrawal for home purchase.
Tax Implications: If you withdraw your PF before completing five years of service, it becomes taxable under the "Income from other sources" category, subject to a 10% Tax Deducted at Source (TDS).
Joint Purchase: PF withdrawal for joint property purchase is not permissible except for your spouse.
Ownership: The newly constructed house must be owned by you, your spouse, or jointly by both.
Instalments: PF withdrawal must be made in instalments, and construction should commence within six months of the first withdrawal, with completion within 12 months of the last instalment.
Property Transaction: If you use PF withdrawal to buy a house, the property transaction must be completed within six months from the date of online PF withdrawal.
One-time Use: PF withdrawal for housing is allowed only once a lifetime.

PF Withdrawal Process

Below is the process for PF advance withdrawal for purchasing a home:

Eligibility Criteria: Check that you meet the eligibility criteria for PF withdrawal.

Documentation: Some documents are required for PF withdrawal for a home purchase. These include:

Various forms, such as Form 31, 10D, 10C, and 19
Latest Bank statement
2 revenue stamps
Proof of Address - Passport, Aadhaar Card, Electricity bill, etc.
Proof of Identity - PAN card, Aadhaar card, etc.
Cancelled cheque of the bank amount where you wish to receive the funds

Form Submission and Verification: Fill in all the required details and submit the completed form along with the documents mentioned earlier. Forms can be submitted on the EPF portal or with your employer. Submitted applications are verified and duly processed.

Fund Disbursement: Once the application is processed, the approved amount is credited directly to your bank account.

Other Provident Fund Uses

In addition to withdrawing a certain amount from your PF account to buy a house, EPFO also permits:

Umang App: PF Withdrawal Mobile App

The Umang App is a one-stop solution for all you need regarding PF withdrawal for buying a house.

Download the Umang App: Download the Umang mobile application from your preferred app store (Apple App Store or Google Play Store).
Access EPFO Services: Open the Umang app, click "EPFO Services," and choose the "Raise Claim" option.
Provide UAN: Enter your Universal Account Number (UAN) and select the withdrawal type. Input the OTP sent to your registered mobile number.
Submit Application: Click "Submit" and note the reference number generated for your application.

How to check the PF withdrawal status on the Umang App?

To check the PF withdrawal status using the Umang App:

Open the Umang app, click "EPFO," and select "Track Claim."
Enter your UAN and the OTP received on your registered mobile number.
The status of your PF withdrawal claim will be displayed.

Frequently Asked Questions

1. Is PF withdrawal taxable?

Ans: If the PF amount withdrawn is higher than Rs. 2.5 Lakh, it is considered as ‘income from other sources’ and hence taxable.

2. How many times can I withdraw from my PF account?

Ans: You are allowed to withdraw from your PF only once.

PF withdrawal for Property Purchase: Procedure & Rules

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