PF Withdrawal for Home Loan

Buying a home is a key life milestone often requiring financial support. In India, the Employees' Provident Fund (EPF) and Provident Fund (PF) are vital savings that ensure post-retirement security but also assist in immediate needs like home purchases. Familiarizing oneself with PF withdrawal options for home loan repayment is essential, enabling users to strategically access their savings, thereby lowering loan burdens and EMIs. Leveraging EPF for home loans can hasten the path to homeownership while establishing a sound financial future. EPFO allows withdrawals under specific conditions to help navigate financial challenges effectively.

Latest updates 2025

The EPF interest rate for the 2024–25 financial year has been set at 8.25%.

• The limit for auto-approved advances for medical needs under Para 68J has been raised to Rs. 1 lakh, allowing quicker claim settlements.
• The EPFO has reduced the number of verification steps from 27 to 18 and plans to bring it down to 16 in the future.
• By June 2025, EPF withdrawals may be possible through UPI and ATMs.
• If your UAN is Aadhaar-verified with full KYC, you will not need your employer’s approval for online PF claims and transfers.
•  Aadhaar-linked UAN holders can update details like name, birth date, gender, and marital status online without needing employer approval. However, complex corrections might still need EPFO help.
• EPFO has dropped the requirement for uploading cheque images or attested bank passbooks in some cases where Aadhaar and bank KYC are verified. Cancelled cheques are no longer needed in such scenarios.
• EPFO has partnered with 15 more banks—both private and public—bringing the total to 32, to simplify contributions from employers under the EPFO Act.

Importance of PF withdrawal for home loan repayment

Utilising PF funds for home loan repayment serves as a financial aid for many aspiring homeowners. It provides individuals with the financial flexibility needed to bridge the gap between their savings and the cost of purchasing a home. Additionally, PF withdrawal for home loan repayment enables individuals to reduce their debt burden and accelerate the process of owning their home.

Purpose of PF withdrawal for home loan

The purpose of PF withdrawal for home loan is to provide individuals with financial assistance in purchasing or constructing a residential property. This withdrawal option serves as a significant resource for those seeking to fulfil their homeownership aspirations. By allowing individuals to utilise their Provident Fund (PF) savings, it helps bridge the financial gap between their existing resources and the costs associated with buying a home.

Key purposes of PF withdrawal for home loan include:

1. Down payment: PF withdrawal can be used to cover the down payment or initial deposit required when purchasing a home. This reduces the burden of arranging a substantial lump sum amount upfront.
   While PF withdrawal can help with your down payment, combining it with a Bajaj Housing Finance Home Loan can make your dream home even more affordable. Check your eligibility today. You may already qualify for competitive interest rates, find out by entering your mobile number and OTP.
2. Loan repayment: Individuals can utilise PF funds to repay an existing home loan. This option helps in reducing the outstanding loan amount, thereby decreasing the overall debt burden and accelerating the loan repayment process.
3. Meeting additional expenses: Apart from the core cost of the property, there are various additional expenses associated with home buying, such as registration fees, stamp duty, legal charges, and brokerage fees. PF withdrawal can assist in covering these ancillary expenses.
4. Construction or renovation: PF funds can also be used for constructing or renovating a residential property. This option is beneficial for individuals planning to build their own home or undertake significant renovation work.
5. Addressing urgent housing needs: In cases where individuals face urgent housing needs due to factors such as relocation or family expansion, PF withdrawal provides a timely financial solution to secure housing accommodations.

Overall, the purpose of PF withdrawal for home loan is to empower individuals in realising their dream of homeownership by providing them with access to their PF savings when needed most. It offers a practical and viable option for funding various aspects of the home buying process, making homeownership more achievable and accessible for individuals across different income brackets.

Eligibility on various types of EPF withdrawals

Eligibility for PF withdrawal for home loan repayment depends on the specific circumstances and requirements of the individual. Different types of EPF withdrawals cater to various needs, including:

1. Withdrawal for purchase/ construction of house: Individuals are eligible to withdraw a portion of their PF balance for purchasing or constructing a house. This withdrawal is subject to certain conditions and criteria set by the Employees Provident Fund Organisation (EPFO).
2. Loan repayment: EPF funds can also be utilised for repaying an existing home loan. This withdrawal is permissible subject to specific conditions, including completion of a certain number of years of service.

EPF withdrawal rules 2025

The Employees’ Provident Fund (EPF) is a long-term savings scheme aimed at providing financial support after retirement. While it is best to avoid early withdrawal, there are certain cases—like home loan repayment—where it is permitted under specific conditions.

Firstly, withdrawals made before completing five years of EPF membership may be taxable. However, no TDS is deducted if the withdrawal amount is below Rs. 50,000. It is also important to note that funds cannot be withdrawn from the EPF account linked to your current job. Instead, EPF can be transferred to a new employer using the online process.

For those using EPF to repay a home loan, the following rules apply:

• You must have completed at least five years of service.
• You can withdraw up to 90% of your EPF balance after turning 54.
• A partial advance from EPF is allowed for home loan repayment, based on eligibility.
• Necessary documents, such as a loan sanction letter, property papers, and a declaration form, must be submitted.

If you lose your job, you may take out 75% of your EPF after one month of unemployment, and the rest after two months. Always check the latest EPFO updates before proceeding.

Planning to use your EPF for home purchase? Complement it with a Bajaj Housing Finance Home Loan offering interest rates starting from just 7.99%*  p.a. and loan amounts up to Rs. 15 crore*. You may already be eligible, check your loan offers by entering your mobile number and OTP.

EPF withdrawal before 5 years of service

If you take out your EPF before completing five years of continuous employment, TDS will be charged on the withdrawn amount. However, TDS is not deducted if the total withdrawal is less than Rs. 50,000. Keep the following rules in mind if you plan to withdraw funds early:

• Recent updates to ITR Forms 2 and 3 require a year-by-year breakdown of PF deposits.
• This helps the Income Tax Department determine if the withdrawal is taxable.
• They will also assess if extra tax needs to be paid following a review.
• EPF includes four components: your share, your employer’s share, and interest on both.
• If you claimed tax benefits on EPF under Section 80C earlier, all four parts will be taxed.
• If no tax benefit was claimed earlier, only your share will remain tax-free on withdrawal.
• Your tax liability will depend on your income tax slab for each year.
• The tax is charged in the year you make the withdrawal, but calculations are based on each past year.

Withdrawal after retirement

According to EPF guidelines, once you retire at the age of 58, you must apply to receive your final PF amount. Your total EPF balance includes both your contribution and that of your employer.

• If you have worked continuously for 10 years or more, you also qualify for EPS (pension) benefits.
• If you have worked for less than 10 years, you can withdraw the full EPS balance along with your EPF.
• Employees with over 10 years of service will receive monthly pension payments after retirement.
• The EPF corpus withdrawn after retirement is not taxed.
• However, any interest earned on it after retirement will be taxable.
• Registered members can submit their withdrawal claim online through the EPF member portal.
• If the funds remain untouched for more than three years after retirement, tax will be charged on the interest earned.

Documents required for PF withdrawal for home loan repayment

The documentation process for PF withdrawal for home loan repayment typically includes:

1. Proof of identity (Aadhar card, passport, etc.)
2. Proof of residence (utility bills, lease agreement, etc.)
3. Proof of home loan sanction
4. Property documents (sale agreement, construction agreement, etc.)
5. Declaration form for PF withdrawal

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PF withdrawal for home loan repayment

Here are the steps for online provident fund withdrawal

1. Update and authenticate Aadhaar: Log in to the UAN portal, update your Aadhaar number, and link it to your EPF account.
2. Fill out the online form: Complete the PF withdrawal form for home loan repayment, ensuring accurate bank account details are entered.
3. Submit the application: Submit the online application. You can track its progress easily through the portal.
4. Receive funds: The approved amount will be credited to your account within 15 days.

Here are the steps for offline provident fund withdrawal

1. Download Form-19: Get Form-19 from the EPFO website or your previous employer.
2. Complete the form: Fill in all required details and attach a canceled cheque for verification.
3. Submit the form to employer: Provide the form to your employer for attestation.
4. Employer submission: The employer sends the attested form to the regional PF office.
5. Funds disbursement: The amount will be directly credited to your bank account. Note that this process takes longer than online withdrawal.

Provident Fund withdrawal via Composite Claim Form online

Here is a simple guide to submitting the Composite Claim Form online for PF withdrawal:

• Log in to the EPF member portal using your UAN and password.
• Go to “Online Services” and select “Claim (Form-31, 19, 10C & 10D)” from the dropdown.
• Your member details, KYC information, and other service data will appear. Enter your bank account number linked to UAN and click “Verify”.
• Agree to the undertaking by clicking “Yes”.
• Click “Proceed for Online Claim”.
• Choose your claim type under “I Want to Apply for” – full settlement, partial withdrawal, or pension.
• If not eligible for certain options like pension or PF withdrawal due to your service record, those options will not appear.
• If selecting a partial withdrawal (Form 31), state your reason, required amount, and address.
• Sign the certificate and submit. Upload any required documents if asked. The money is usually deposited in your account within 15–20 days after employer approval.
• Note: To apply online, your Aadhaar, PAN, and bank details must be linked and verified on the UAN portal.

Provident Fund withdrawal via Composite Claim Form offline

• You can also choose to fill out and submit the EPF Composite Claim Form offline. Here is how:
• Download the Composite Claim Form PDF.
• Use the Aadhaar version if your Aadhaar and bank details are already linked on the UAN portal and your UAN is active.
• If these are not linked, use the Non-Aadhaar version.
• Submit the completed Aadhaar form at the EPFO office without your employer’s signature.
• If you are using the Non-Aadhaar form, you must get it attested by your employer before submission.

How to withdraw pension contribution in EPF

To take out the pension portion of your EPF, follow these steps:

• Submit the EPF Composite Claim Form either online via the member portal or offline at your EPFO branch.
• Full pension withdrawal is only available if you meet the rules: you must be at least 58 years old and have completed 10 or more years of service.
• Make sure to select “pension withdrawal” as the purpose when filling out the claim form.

Taxation on EPF withdrawal

• TDS is applied on withdrawals made before 5 years of service.
• If you provide a PAN, the TDS rate is 10%. Without a PAN, it is 20%.
• If the total withdrawal is less than Rs. 50,000, no TDS is deducted.
• TDS does not apply in the following cases:
  • If your job ended for reasons beyond your control, such as company closure or layoffs.
  • If you had to stop working due to a serious health issue like a mental or physical disability.

How to avoid TDS on PF withdrawal

Withdrawing EPF early can result in high tax charges. Here are tips to avoid TDS:

• When switching jobs, transfer your EPF balance instead of withdrawing it.
• If you take a career break, do not withdraw immediately. EPF continues to earn interest for up to 3 years, though the interest during this time is taxable.
• TDS is not applicable if you withdraw the corpus after 5 years of continuous service.

Online grievances portal for PF withdrawal

• EPFO has introduced the EPF i-Grievance Management System (EPFiGMS) to help members resolve their concerns.
• This platform is open to EPF members, retirees, and employers.
• You can use it to file a complaint, send a reminder, track the status, upload documents, or reset your password.
• It is particularly useful for addressing PF withdrawal-related issues and uploading relevant documents.

Advantages of using PF for housing loan

There are several advantages to using your Provident Fund (PF) for a housing loan, including:

1. Lower loan amount: Using your PF for a down payment reduces the amount you need to borrow, which can result in smaller EMIs.
2. No repayment obligations: Since it's your own money, you don't have to worry about paying it back like other loans.
3. Immediate access to funds: You can quickly arrange a large sum without taking out a personal loan or breaking other investments.
4. Favourable interest rates: Reducing the amount you borrow with your PF could help you secure better home loan interest rates

However, withdrawing from your PF early may reduce your retirement savings and impact your future financial security. It's not recommended to withdraw your EPF balance before you have completed five years of continuous service with your company.

Want to optimise your home financing strategy? Combine your PF withdrawal with a flexible home loan from Bajaj Finserv that offers repayment tenure up to 32 years and no foreclosure fees. Check your loan offers now. You may already be eligible, find out by entering your mobile number and OTP.

In conclusion, PF withdrawal for home loan repayment offers a valuable avenue for individuals to realise their dream of homeownership. By understanding the eligibility criteria, rules, and documentation requirements, individuals can navigate the process with confidence and achieve their homeownership goals.

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