Employees’ Provident Fund Organisation (EPFO) has revised its PF withdrawal norms under the EPF Scheme, 1952, offering significant relief to first-time homebuyers.
The newly introduced Para 68-BD allows EPFO members to withdraw up to 90% of their PF corpus for housing-related expenses—including down payments, EMIs, and construction costs—after just three years of account opening, down from the previous five-year requirement.
This one-time withdrawal facility is expected to unlock dormant savings for EPFO members.
It aims to ease the financial burden of upfront housing costs, especially for middle-class salaried employees facing rising property prices.
What Has Changed in PF Withdrawals: Key Highlights of Para 68-BD
- Eligibility Period Reduced: Members can now withdraw funds after 3 years of EPF membership, instead of 5 years
- Withdrawal Limit Increased: Up to 90% of the total corpus can be accessed for housing needs
- One-Time Use: The facility is available once in a lifetime per member
- Expanded Usage: Funds can be used for buying a ready home, constructing a house, or paying EMIs
Previously, the withdrawal limit was based on 36 months of contributions plus interest, or the cost of the property—whichever was lower.
Members enrolled in housing schemes were also barred from accessing PF funds for home purchases.
Impact on Real Estate and Buyer Sentiment
Industry experts are calling the reform a “game-changer” for India’s housing market.
Abhishek Raj, CEO of Jenika Ventures, noted that the biggest hurdle for first-time buyers has always been arranging the down payment.
“Now that people can use their PF savings, this financial barrier has been largely removed,” he said.
In cities like NCR, Pune, Indore, and Lucknow, real estate developers are already witnessing increased site visits and serious inquiries.
Pawan Sharma, MD of TRG Group, added that the move will boost demand in mid and affordable housing segments, especially in high-growth corridors like Noida and Greater Noida.
Other Major EPFO Reforms to Know
Alongside the housing-related changes, EPFO has introduced several other updates to improve fund accessibility:
- Instant Withdrawals via UPI/ATM: Members can withdraw up to ₹1 lakh instantly for emergencies starting June 2025
- Auto Settlement Limit Raised: Threshold increased from ₹1 lakh to ₹5 lakh, enabling faster claim processing
- Simplified Claim Verification: Parameters reduced from 27 to 18, with 95% of claims settled within 3–4 days
- Easier Withdrawals for Life Events: PF access for education, medical, and marriage expenses has also been streamlined
These reforms are part of EPFO’s broader push to enhance liquidity, improve service delivery, and align with national goals like ‘Housing for All’ and Pradhan Mantri Awas Yojana (PMAY).
Expert Advice: Use PF Funds Wisely
While the new rules offer greater flexibility, financial advisors urge caution.
“This reform turns dormant savings into an action-oriented homeownership tool,” said Abhishek, “but buyers must ensure they don’t compromise their retirement security.”
Experts recommend seeking professional guidance before making large withdrawals from long-term savings.
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