Now, Online Claim Mandatory For PF Withdrawals Over Rs 10L
It was in May last year that the government had announced that the many members of the EPFO could use their retirement savings to buy a home of their own. In a recent development, the Employees’ Provident Fund Organisation (EPFO) has made it mandatory to file online claims for provident fund withdrawals above Rs 10 lakh. This is a move towards becoming a paperless organisation promoting the Centre's mission of digitisation.
According to a report by PTI, the official said that the field offices have been directed that claims must be accepted online in case the amount of provident fund withdrawal is above Rs 10 lakh. In short, homebuyers, who are planning to withdraw a large sum for buying their home will have to make claims online.
Here is what you need to know about the housing scheme the EPFO introduced for its subscribers. This is in line with the EPFO vision, which is to "reposition itself as a world-class social security organisation providing world-class services".
What’s in store for homebuyers
It was in April 2017, the Ministry of Labour & Employment amended the law for the subscribers of the EPFO. This amendment allows the subscribers, who want to buy a house of their own, to withdraw upto 90 per cent of their savings. Also, the subscribers can also use their provident fund savings to pay equated monthly instalments (EMIs).
However, those planning to buy a property under this scheme, will have to form a group of 10 members. It is only then that they will be able to buy houses from a developer. It is also mandatory for the subscriber to have contributed for at least three years and must have at least Rs 20,000 accumulated in the account to apply for the scheme.
Additionally, the rules do not encourage secondary or resale homebuying. The EPFO will only be making direct payments to the co-operative society, state government, central government, or any housing agency under any housing scheme, or any promoter or builder. This payment can be done in part or in one go.
Why is it helpful?
*There are over six crore subscribers of the EPFO who could avail the benefits of this scheme. This makes it easier for homebuyers, who otherwise take a long time to save for their downpayment. They could now use their own savings for the purpose.
*What if your monthly EMIs are deducted from your EPF account instead of your take home salary? This could be a relief for many.
*These are ready funds that will make it easier for the government to put this scheme in place.
With inputs from Housing News