You can withdraw your Provident Fund (PF) for a home loan whether for purchasing, constructing, or repaying a home loan. However, some eligibility criteria and conditions must be met, such as a minimum number of years of service and a cap on the amount that can be withdrawn.
Here are the conditions and eligibility criteria for various types of partial EPF withdrawals:
Withdraw up to six times the monthly salary or the employee's share with interest, whichever is lower. No minimum service period is required.
Withdraw up to 90% of the corpus after three years of service if the house is registered in your name or jointly. A minimum of 3 years of service is required to withdraw the amount.
Withdraw 50% of the employee’s contribution with interest after seven years of service for your own, siblings', or child's marriage.
Withdraw 12 times the monthly salary after five years of service if the house is in your name or jointly with your spouse.
Withdraw 24 times the monthly salary for a plot or 36 times for a house after five years of service. This can be done only once in a lifetime.
Withdraw the entire corpus after 58 years of age.
Withdraw 75% of the corpus after one month of unemployment and the remaining 25% after two months.
Below are the rules for EPF withdrawal in 2025 -
An individual cannot withdraw PF funds, partially or fully, while employed.
Up to 75% of funds can be withdrawn if unemployed for at least one month, and the balance if unemployed for two months or more.
TDS cannot be avoided even by producing Form 15H/Form 15G.
A TDS of 10% is levied on withdrawals of Rs.50,000 or more within five years of opening the EPF account if a valid PAN Card is available; otherwise, it's 30%.
Loans against PF savings are available only after a certain number of years in service.
PF balance can be transferred to a new account without withdrawal if the UAN is active.
Full PF balance can be withdrawn if unemployed for at least two months or if the new job starts more than two months after the last job.
Follow these instructions to withdraw your PF online for home loan repayment.
Step 1: Visit the EPFO member portal and click on the 'Service' option. From the drop-down menu, select 'For Employees.'
Step 2: Navigate to the 'Member UAN/Online Services (OCS/OTCP)' section. Enter your UAN and password, followed by the CAPTCHA code.
Step 3: Scroll to the 'Manage' section and use the drop-down menu to select 'KYC.'
Step 4: Review your KYC details to verify your bank account information. This step is crucial as the EPFO will transfer the PF withdrawal amount to this account.
Step 5: If your KYC details are correct, proceed to the 'Online Service' tab. From the drop-down menu, select Claim (Form - 31, 19, 10C & 10D).
Step 6: A 'Certificates of Undertaking' will be generated. Click 'Yes' on the certificate to proceed to the next steps.
Step 7: Click on 'Proceed for Online Claim.'
Step 8: In the form, go to the 'I Want To Apply For' section and choose from the following options:
EPF part withdrawal
Complete EPF settlement
Pension withdrawal
If you do not meet the withdrawal eligibility criteria, these options will not be displayed.
Step 9: Select Form 31, the PF Advance form required for PF withdrawals. Specify the reason for withdrawal, your address, and the amount needed. Check the self-declaration box.
Step 10: Your PF withdrawal application is now submitted. Once your employer approves and processes it, the funds will be deposited into your account within a few business days.
There are upsides and downsides to withdrawing EPF for a home loan. Let’s look at the pros and cons so you can make a better financial decision.
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Pros |
Cons |
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Withdrawing from your PF can provide immediate funds to reduce the burden of a housing loan, potentially lowering monthly EMIs or the overall loan tenure. |
Premature withdrawal reduces the corpus available for retirement, potentially affecting your financial security in later years. |
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Using PF funds to pay off a portion of your housing loan can significantly reduce the interest payable over the loan's duration, saving money in the long run. |
Withdrawing funds early means losing out on the compound interest that would have accumulated over time, diminishing the overall growth of your retirement savings. |
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Accessing PF funds can help you achieve homeownership sooner, providing a sense of security and stability for you and your family. |
Depending on the amount and timing of the withdrawal, you may face tax liabilities, such as TDS, which can further reduce the net amount received. |
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Unlike loans, withdrawing from your PF does not require repayment, freeing you from additional financial commitments. |
There are specific eligibility criteria and restrictions on the amount that can be withdrawn, which may limit the effectiveness of using PF for housing loan purposes. |
Withdrawing from your Provident Fund (PF) for a housing loan can be a strategic financial decision for immediate relief and potentially reducing long-term interest costs. However, it's important to consider the impact on your retirement savings and the potential loss of compound interest.
While the immediate benefits of home ownership and reduced loan burdens are appealing, the long-term implications on your financial security must be taken into consideration. Understanding the eligibility criteria, tax implications, and opportunity costs associated with premature PF withdrawal is crucial.
You can check your PF claim status online via the EPFO member portal by logging in with your UAN and password.
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