How to use your provident fund to invest a property buying

Here we are mention some process to buy a home through a provident fund

Although a minority of the salaried persons have a provident fund account, only a few are conscious that they can take out from this fund, for various purposes associated with a household

There are several bases from where one can fund the buying or construction of a home – from borrowing from relatives and friends to taking a Salaried people, home loan, who are contributing to their provident fund, have an extra avenue to fund their property buying. One can withdraw from the balance in the provident fund account, subject to definite situations and within certain bounds. The withdrawals can be used for various purposes like buying flats of a villa or a house (under-construction or ready-to-move-in) or for constructing a property. The scheme also agrees on you to withdraw your EPF balance to repay your property loan.

For purchase of a house or Flats or for construction of a house

An employee who has finished at least 5 years of involvement to his provident fund account, can take away currency for the buying of a property and/or construction or purchase of a home. The amount can be withdrawn for the construction of a property on the plot of land owned either by you or by your spouse, or together by both. The suitable amount of withdrawal would rest on the purpose for which you are withdrawing the cash. For buying a flat, the amount accessible for drawing shall be limited to 24 months’ basic pay and (DA) dearness allowance. The amount of drawing, however, shall in no circumstances exceed the cost of the property.

In case you want to avail of the withdrawal ability to buying or construct a property, the accessibility gets improved to 36 months of your DA and basic salary, with the supreme amount again limited to the price of the property. It is relevant to note that the property cannot be bought together with anyone else, except your partner, for drawing from the provident fund. In case you draw from your provident fund account, the building should begin within 6 months and should be finalized within twelve months of the past payment of drawing. In the situation, you intend to buy a property ready-to-move-in, the deal for buying also requirements to be finished inside 6 months. The withdrawals for buying/construction can be ready in one or extra segments, depending on the circumstances.

Withdrawal facility for the participant of a housing society

In adding to the withdrawal amenities offered to you separately, you can similarly gain of the drawing capability from your EPF account, if you are a cooperative society of a member or listed housing society. This withdrawal ability can be availed of, for purchasing land for constructing a residential home from an approved government agency or any government. The similar facility is as well available for the purpose of buying or structure of a residential home. For being qualified for this ability by virtue of being an associate of society, society should at least have 10 memberships. The maximum amount of drawing allowable below this offers is limited to 90% of the accumulated stability in your EPF account, topic, however, to the price of the asset to be developed.

The drawing capability as an associate of a cooperative society cannot be ready, unless the member has been donating to the EPF scheme for a smallest of 3 years and the collective of the buildup of the member, with his/her partner, if the partner is also an associate, is a smallest of Rs 20,000 on the date of the submission for drawing. This ability can be availed by you only once in your lifetime. Below this offer, you can get your installments of any credit taken for these purposes funded through your EPF account, topic, however, to there being satisfactory balance in your account.

Withdrawal for Improvement/addition of the Property owned by self and/or the partner

You are also eligible to draw cash from your PF account, for creating improvements or additions to a residential home that is already possessed by you, or your partner, or jointly by together. This drawing can single be availed of, after 5 years from the achievement of the structure of the home. It is not compulsory that the home for which you want to convey out the developments should be similar for which you had availed of the drawing ability. This drawing for enhancement of your property can be availed, even if you have not availed of the drawing ability for buying or construction of this home. The amount that you are qualified to withdraw, for enhancement or adding to the current home, is restricted to twelve months’ DA and basic salary topic to the price of such upgrading.

You can also benefit from the drawing ability again, only the next ten years from the first drawing for improvement/addition of the current home, topic to the similar suitability criteria, vis-à-vis the amount. Any amount is withdrawn from your EPF account and which is not used for the above-identified purposes has to be returned to the EPF account.

Advances for repayment of property loan

The provident fund pattern agrees to you to avail of the drawing ability, for a refund of the unpaid balance of a house loan occupied by you or your partner, for any of the above resolutions. The amount cannot exceed 36 months’ DA and basic salary. This drawing can only be ready for refund of the property loan taken either by the affiliates and/or by the partner, from quantified things like state governments and governments , nationalized banks,  registered cooperative societies, state housing board, public financial institutions, municipal corporations, or any development authority, for buying of a property. This ability can be taken after you have finished at least ten years of influence to the EPF account.