However, you need to find at least nine other EPF account holders who are also part of a cooperative society through which you intend to purchase a flat or land parcel

You can now leverage up to 90% of your retirement savings parked in the Employees’ Provident Fund (EPF) account to have a house of your own.

Under the new rules notified by the government, EPF members can make a one-time withdrawal or use their PF savings to make instalment payments for buying a flat or a tract of land to construct a house.

For this new enabling provision to be effective, however, you need to find at least nine other EPF account holders who are also part of a cooperative society through which you intend to purchase a flat or land parcel. The society must be registered under any law, says a notification issued by the Union Ministry for Labour and Employment on April 12.

“The move is a step forward towards the Prime Minister’s goal of ‘Housing for All’ by 2022,” Labour Minister Bandaru Dattatreya told The Hindu. “It will benefit at least four crore EPF subscribers who can easily make use of their savings to build a flat for themselves by forming cooperative societies.”

Previously, employees who have completed five years of service were allowed to withdraw Provident Fund savings equivalent to 36 months of their salary (basic salary and dearness allowance) for the construction of a flat or 24 months of the salary for purchasing land.

Central Provident Fund Commissioner V.P. Joy said in January that the existing provisions were not being utilised ‘properly to withdraw money for constructing flats or buying land.”

The notification said that EPF members can withdraw their savings to “purchase a dwelling house or a flat, including a flat in a building owned jointly with others, outright or on hire-purchase basis, or for the construction of a dwelling house, including the acquisition of a suitable site for the purpose.”

Repayment of loans

Employees with at least three years’ subscription to the EPF scheme will be allowed to withdraw their savings for housing purposes, including repayment of housing loans from their monthly contributions.

“In addition to lumpsum withdrawal of up to 90% of accumulations in provident fund accounts, members may opt for full or part repayment of loans out of monthly PF contribution also,” a directive issued by the EPFO headquarters to all its regional provident fund commissioners on April 21 said.

Further, the EPFO will make the payment for constructing flats or buying land directly to the cooperative society, housing agency or builders and not to the EPF subscribers.

In case the EPF subscriber fails to get the flat constructed due to some reasons, she will be liable to ensure that the withdrawn EPF savings is refunded into their provident fund account within 15 days “of such cancellation or non-allotment.”