I am finding it difficult to cope with my home loan repayment. Can I withdraw from my Provident Fund savings of over a decade to pay the outstanding? What is the procedure to withdraw money from the PF account? - Vinay Soota, Delhi
Although the Provident Fund (PF) corpus is meant to ensure you have a safe future (retired life), there are provisions which allow you to dip into your future savings to tide over your current financial challenges. Repaying a home loan is one such instance, when you can withdraw from your PF. According to the PF provisions, you can withdraw from the accumulated PF for repaying the housing loan availed from a nationalised bank and other specified institutions subject to prescribed conditions. Mainly, you should have completed 10 years of membership of the fund and your own share of contribution, with interest thereon, should be Rs.1, 000 or more. Moreover, the PF amount that can be withdrawn is subject to lower of the following thresholds:
1. The basic salary plus dearness allowance for 36 months
2. Aggregate of your own share of contribution, employer’s share of contribution along with interest earned thereon
3. The outstanding (principal and interest) home loan amount
The process is simple; you have to make an application to the regional PF commissioner through your employer along with Form 31 for withdrawal of the PF amount. Also, you need to obtain a certificate from the bank from where you have taken the home loan, mentioning the outstanding loan amount and produce it before the PF commissioner, if required. Once the PF commissioner clears your application, the payment is directly made to your home loan lender. The rules, however, vary if the PF you are contributing to is a private PF trust maintained by the employer.
