The amount deposited in PF from the salary secures the future financially. But at present, the needs can also be met by taking a loan from it.
EPF i.e. Employee Provident Fund works like an emergency fund. This amount deposited from the salary is a support for old age which helps in living life after retirement, but sometimes such situations arise when this money also has to be withdrawn for immediate purposes. But, if you do not want to withdraw it and also need money, then you can take a loan from it. The Employees Provident Fund Organization (EPFO) also provides the facility of taking loan to salaried employees.
What is EPF loan?
In fact it is an advance payment. Under normal circumstances, you withdraw the money you get on retirement in advance. The employee does not have to pay any kind of interest on this. But there is also a restriction in this, that is, there is a limit on the loan amount.
Rate Of Interest
Since it is your own money, you do not have to pay interest on it. If you do not withdraw this money, you would have got interest on it, which is currently 8.25 percent.
But, there are some conditions of the loan also.
To Buy a House
• If you have completed 5 years of service, you can withdraw money from the provident fund to buy a house, flat or plot and build a house on it.
• The withdrawal amount will not exceed 24 months' basic salary and dearness allowance for purchasing the plot. For purchasing a constructed house, it will be equal to 36 months' basic salary and dearness allowance or the total amount deposited by self and employer and the cost of the house, whichever is lower.
• Similarly, withdrawals can be made after 5 years of purchasing the house for additional construction, repairs or renovation and again after 10 years of the first renovation. An amount equal to 12 months' salary plus dearness allowance and the cost of reconstruction, whichever is less, can be withdrawn for renovation.
• You can also withdraw money to repay the already existing home loan. The minimum service for this purpose is 10 years. The withdrawal amount will be equal to 36 months' salary and dearness allowance.
• Withdrawals made for home purchase will be paid directly to the seller.
On Not Getting Salary
If the salary has not been paid for more than 2 months due to strike or other reason, then you can withdraw the deposited amount and the interest accumulated on it from your own income.
Marriage-Higher Education
On completion of 7 years of membership, a loan can be taken from the Provident Fund for the marriage of self or son/daughter and brother/sister. For this purpose, you can withdraw up to 50 percent of the amount deposited by you. You can withdraw money maximum 3 times for marriage at home. Loans can also be taken for children's education above matriculation.
For Medical
There is no minimum service period for this. For the medical treatment of yourself or your family, you can withdraw 6 months' basic salary and dearness allowance and whatever amount is less in your own contribution.
Apply like this
The entire process of withdrawing money from provident fund is online. For this it is mandatory to link Aadhaar number with your Provident Fund Account (UAN). Application can be made by filling the required details in Joint Claim Form 19, 10C and 31. If all aspects are correct, the claim amount is credited to your bank account in about 3 weeks.
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