Acquiring or constructing your dream house is a big deal. As a salaried individual making contributions to the Employees’ Provident Fund (EPF), you already have a rich asset in your pocket in the form of your Provident Fund (PF). Do you realise that under the PF scheme, you can withdraw a part of the balance in your PF towards the construction of a house? Whether you are planning to construct on a plot you own or share with your partner, this blog will guide you through all that you must know regarding withdrawing PF for the construction of a house.
Steps to Withdraw PF for House Construction
Step 1: Log in to the EPFO Portal
Go to the official EPFO website and sign in using your UAN (Universal Account Number) along with your password.
Step 2: Fill Out Form 31 for PF Advance
Once logged in, click on the Online Services section and choose Form 31 from the dropdown menu. In the form, select “Construction of House” as the reason for withdrawal.
Step 3: Upload Required Documents
Submit the necessary documents online. This typically includes:
- Proof of land ownership
- Estimated cost of construction
- Your identity documents (such as Aadhaar, PAN, etc.)
Step 4: Wait for Approval
After submission, your application will go through a verification process by the EPFO and may also require your employer’s approval, depending on the case.
Step 5: Fund Transfer to Your Bank Account
Once your request is approved, the withdrawal amount will be credited directly to your registered bank account within 10 to 15 days.
Why PF Withdrawal for House Construction is Important?
Your Provident Fund (PF) balance can be an excellent financial safety net in the moments of life, such as when you are planning to construct your own home. The EPFO allows you to withdraw some portion of your PF towards constructing a house, which can prevent you from taking huge loans or incurring hefty interest charges. By using your hard-earned savings, you reduce the cost burden and make a serious step towards making your dream house a reality.
Eligibility for PF Withdrawal for House Construction
Before you apply for a PF withdrawal to finance your house building, ensure you fulfill all the conditions stipulated by the EPFO. Here’s what you need to do:
Minimum Years of Service
You must have maintained continuous deposits to your Provident Fund for at least 5 years. This period is needed to ensure your account has sufficient savings to support a partial withdrawal.
Purpose of Withdrawal
The EPFO allows you to withdraw your Provident Fund savings for specific home-related purposes, such as:
Building a house on a plot that belongs to you, your partner, or both.
Eligibility Amount
You can withdraw 90% of your overall PF balance, your contribution, and your employer’s contribution, as well as the interest that has been earned over the period.
Ownership Criteria
The location where construction is to be carried out should be legally owned by:
- You alone
- Your spouse
- Or both of you together
Ensure property registration documents are straightforward and well registered, particularly in urban cities like Bengaluru or Chennai, where document checking may be more stringent.
Completion Timeline
After receiving the withdrawn amount, construction must ideally be completed within a period of 6 months. The EPFO may ask for proof of completion or progress, so it is advisable to keep all receipts and documents handy.
Documents Required for PF Withdrawal
When you intend to withdraw your provident fund for constructing a house, ensure that you possess the following documents so that the application goes on easily:
- Form 31 (PF Advance Application): It should be used exclusively for house building and can be filled out online by logging into the EPFO member portal.
- Land Ownership Proof or Sale Agreement: Documents clearly show your land ownership where the house will be constructed.
- Construction Cost Estimate: A proper estimate created and signed by a licensed architect or civil engineer, itemising the estimated construction costs.
- Identity Proof: Proper identification, like your Aadhaar card and PAN card, for verification.
- Employer’s Consent: In certain instances, your employer must approve your request before the EPFO processes it.
- Bank Account Details: A cancelled cheque or recent bank statement should be provided to determine that the money is credited into the right account.
What are the conditions for PF Withdrawal for Home Purchase?
Purchasing a first house is a milestone moment, and the good news is that your Provident Fund can assist you in this. The Employees’ Provident Fund Organisation (EPFO) provides an option for eligible members to withdraw a portion of their PF balance to purchase a flat or house. However, there are some conditions to be met to enable easy processing of the claim. From eligibility criteria to paperwork and web checks, this is a step-by-step guide on what you need to do to access your money confidently and conveniently.
1. Confirm Eligibility
Ensure that you’ve been contributing to your PF account for at least 5 years. Also, property should be either in your name or jointly held with your spouse.
2. Gather the Required Documents
Keep the necessary paperwork ready, including:
- Sale or ownership agreement of the property
- Aadhaar card and PAN card
- Bank account details (cancelled cheque or recent statement)
3. Log in to the UAN Portal
Go to the EPFO official website: unifiedportal-mem.epfindia.gov.in and provide your UAN and password to log in.
4. Submit Your Claim (Form 31)
Go to the “Online Services” tab, select “Form 31,” and select the purpose as “ Purchase of House/Flat.” Upload documents during the application.
5. Authenticate Using OTP
You will get a One-Time Password (OTP) on your Aadhaar-linked mobile number. Enter the OTP to authenticate it successfully.
6. Follow Your Claim & Get Paid
When your claim is received and cleared, money will be transferred to your bank account or the builder within 7 to 10 working days.
Conclusion
Constructing your dream house is a milestone, and taking advantage of your provident fund can help you lighten the cost burden that otherwise attaches. Rather than opting for humongous loans with high interest, taking advantage of your PF savings is a bright and liberating choice. The EPFO has made the withdrawal process relatively simple; if you are constructing on your own plot or a jointly owned property, this benefit helps bring your vision of a dream home closer to reality without overwhelming your finances.
Apoorva H P Achar