Funding home purchase may soon get easier as the government plans an amendment in EPFO Act. The amendment in the Employee’s Provident Fund Act will enable around 4 crore members of retirement fund body to withdraw up to 90 per cent of their fund for making down payments while buying homes.
Employees’ Provident Fund Organisation (EPFO) subscribers will also be able to use their EPF accounts for paying EMIs of home loans once the amendment is made. Under the new proposed provision in the EPF scheme, EPFO subscribers would have to form a cooperative 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,” Labour Minister Bandaru Dattatreya said in a written reply to Rajya Sabha on a query about Housing Scheme for the members of EPFO.
The minister told the House 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 per cent from the fund for purchase of dwelling house/flat or construction of dwelling house/acquisition of site.”
The total number of EPF member accounts as on March, 31, 2016, as per Annual Report for 2015-16, is 17.14 crore and on an average, contributions have been received in respect of 3.76 crore members during the year 2015-16.