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Unleash the potential

Repurpose your provident fund


Some call it forced investment. Some call it retirement backup. But whatever you call it, it’s your hard-earned money that you probably forgot about while applying for a home loan. Most of the salaried employees have a provident fund but very few even know that they can withdraw from this fund for different purposes like purchasing, renovating or even constructing a house. So, we tried to gather some relevant information for you and make that decision-making a little easier.

If you are purchasing a house, constructing it or buying a plot…

The money can be withdrawn after 5 years of contribution.

• The money can be withdrawn after 5 years of contribution.
• You can also take the loan against your PF for the construction of a house on a plot owned by you, your wife or jointly owned by both.
• Loan for purchasing a plot will be restricted to 24 months basic salary and Dearness Allowance, and 36 months and Dearness Allowance in case you are purchasing a house or constructing one. (This is subject to the maximum of the lower of either the balance in your provident fund account or the cost of the plot)
• Please note that a joint purchase can only be done with your spouse.
• The construction has to begin within 6 months, and end within 12 months of withdrawal respectively.
• The purchase in case of a constructed house also needs to be made within 6 months of withdrawal.
• However, you can make the withdrawal in installments in both the cases.

 If you are renovating the house owned by you or your spouse…

• Withdrawals in this case can only be made 5 years post the completion of the construction.
• The house being renovated need not be same as the one you withdrew the funds for.
• You can withdraw money for renovation even if you don’t really need the money for renovation.
• The amount, in this case, is restricted to 12-month basic salary and Dearness Allowance (subject to lower of the balance relatable to employee’s share with interest in your account or the cost of such renovation)
• Do remember that the second withdrawal in this case can only be made after 10 years of the first.

If you need an advance to repay your housing loan…

• The advance can be taken to repay loans taken by you or your spouse
• The amount, in this scenario, cannot exceed 36-month basic salary and Dearness Allowance.
• The loan to be repaid can be taken by you or your spouse, only if you or your spouse are from specified entities like government/ state government, registered co-operative society, state housing board, nationalized banks, public financial institutions, municipal corporation or any development authority.

We hope you now know the power of your provident fund and how you can use it to the fullest to make or shape up that dream house of yours.


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