If you are a salaried class person, have been working for many years and are planning to buy a house, then some recently changed rules may benefit you.
Actually, the Employees Provident Fund Organisation i.e. EPFO has made some changes in the rules which can make the problem of those buying their first home a little easier. 12 percent of the employee’s basic salary is deposited in the Provident Fund. The employer, i.e. the company in which the employee works, also deposits the same amount in this account.
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Under the new rules of EPFO, EPF members who intend to buy their first home will be able to withdraw more money from their PF account than before. This amount can be up to 90 percent of the total amount deposited in the employee’s PF account.
Earlier this amount was equal to the amount deposited in the employee’s PF account in 36 months. These changes have been made under Para 68-BD of EPF Scheme 1952. As per the new rules, EPFO members can withdraw up to 90% of their PF for home-related needs such as construction, downpayment for buying a house or paying home loan EMI.
Earlier, to withdraw money in this manner, the members were required to have worked continuously for five years, but according to the new rule, the members can withdraw the money only after three years of opening their EPF account. Yes, but there is a condition. Members can use this PF advance withdrawal option only once in their lifetime.
EPFO has also amended two more rules for withdrawing money from PF account. Now members can withdraw up to Rs 1 lakh immediately in case of emergency needs. EPFO claims that very soon members will be able to withdraw emergency funds from their PF accounts through UPI and ATM.
But this facility will be available only to those whose UAN i.e. Universal Account Number is active and fully verified by KYC. Also, the bank account of the EPFO member should be linked to EPFO and linked to Aadhaar.
Auto settlement limit also increased
Actually, during the time of Covid 19, the government had started the facility of auto settlement under PF, but now it is being made a permanent feature. Auto settlement means there is no need for manual verification for this claim. That is, if you want to withdraw an amount of up to Rs 5 lakh from EPFO, it will be automatically approved and the amount will be transferred to the member’s account within 72 hours.
EPFO has also claimed to simplify the claim process. It has been said that the verification parameters have been reduced from 27 to 18. It is claimed that 95 percent of the claims are settled within three to four days.
Apart from this, the requirement of uploading verified photo copy of cheque book or bank passbook for online claim has been abolished. Since the name of the bank account holder is already verified while linking the EPF account with Universal Account Number (UAN), now there is no need for a verified copy of cheque or passbook.
Also, the bank account seeding process now eliminates the role of the employer in bank account verification. This simplified process will also benefit members who wish to update their existing bank account details. They can now do so by entering their new bank account number and IFSC code, which will be confirmed through Aadhaar OTP.
Do you have PF?
Any employee, whether working in government or private sector, has a PF account. 12 percent of his basic salary is deposited in this account and his company also contributes the same amount i.e. 12 percent. But of this 12% amount deposited in the company or employer’s account, 8.33% is deposited in the pension fund and the remaining 3.67% is deposited in PF.
The government has fixed the maximum limit of pensionable salary at fifteen thousand rupees. That is, if your basic salary is 15 thousand rupees or less, then only you will be entitled to the Employees’ Pension Scheme i.e. EPS.
When can money be withdrawn from PF?
You can withdraw money from EPF under certain circumstances. Such as your own or someone in the family’s illness, marriage, education, buying or constructing a house, repaying home loan or in case of unemployment and before retirement. If you have worked for less than five years and withdrawn PF, tax may be levied. There is no tax on service for more than five years.
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