Govt to amend EPF scheme to enable subscribers to withdraw 90% of funds for buying homes

Highlights:

1. The proposed EPF scheme will enable around four crore members of retirement fund body EPFO to withdraw up to 90% of their fund for making down payments while buying homes

2. Under the new proposed provision in the EPF scheme, EPFO subscribers would have to form a co-operative society with at least 10 members for availing the facility

3. The amendment in the scheme will also allow the Employees' Provident Fund Organisation (EPFO) subscribers to use their EPF accounts for paying equated monthly installments (EMIs) of home loans

You may soon be able to buy your dream home as the government will amend Employee Provident Fund (EPF) scheme which will allow EPF subscribers to withdraw major portion of their funds to make down payments while purchasing their homes, PTI reported. 

The proposed EPF scheme will enable around four crore members of retirement fund body EPFO to withdraw up to 90% of their fund for making down payments while buying their homes, Parliament was informed on Wednesday.

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According to the news report, the amendment in the scheme will also allow the Employees' Provident Fund Organisation (EPFO) subscribers to use their EPF accounts for paying equated monthly installments (EMIs) of home loans.

Under the new proposed provision in the EPF scheme, EPFO subscribers would have to form a co-operative society with at least 10 members for availing the facility.

"The Government has taken a decision for modification in the Employees' Provident Funds (EPF) Scheme, 1952, to add a new paragraph 68 BD," the report said quoting Labour Minister Bandaru Dattatreya, as saying in a written reply to Rajya Sabha on a query about Housing Scheme for the members of EPFO.

The report quoting the minister as stating to the House further said that the new provision provides that "a member of Employees' Provident Fund (EPF) being a member of a co-operative society or a housing society having at least 10 members of EPF, can withdraw upto 90% from the fund for purchase of dwelling house/flat or construction of dwelling house/acquisition of site."

The minister also told the House that the proposed paragraph to be inserted in EPF scheme has not been notified, therefore, no targets have been fixed (for giving advances under this facility).

He said that the total number of EPF member accounts as on March, 31, 2016, as per Annual Report for 2015-16, is 17.14 crore.

He further said that on an average, contributions have been received in respect of 3.76 crore members during the year 2015-16.

The withdrawal facility from the Provident Fund (PF) account under the Scheme will be available to only those PF members who fulfill the conditions prescribed, he said. 

ALSO READ: Retirement fund body EPFO to launch housing scheme for over 4 crore subscribers in March