Can I Use EPF Withdrawal to Pay Off a Personal Loan for Plot Purchase? Seeking Advice

Hi,

I have taken a personal loan to purchase a plot 2 years back. Can I apply for EPF withdrawal now for the purpose of plot purchase and close the personal loan taken for that purpose? Any guidance on this topic is appreciated.

Regards,
Rajesh

Dear Mr. Rajesh, There are provisions to withdraw fully or partially, subject to the following conditions; provided a minimum employee contribution (with interest) of Rs. 1000 is lying with PF.

1. 68(B) - House Construction/Purchase/Plot Purchase
- Minimum service required: 5 years.
- Amount admissible: 100% of both employee & employer contribution.

2. 68(H) - Lockout of 2 Months or More
- No minimum service.
- Amount admissible: 6 times of basic + DA or employee contribution, whichever is less.

3. 68(J) - Hospitalization or Major Surgical Operation
- No minimum service, but applicable for members outside ESI coverage.
- Amount admissible: 6 times of basic + DA or employee contribution, whichever is less.

4. 68(K) - Education and Marriage
a) Towards post-metric education of children.
b) Towards own/brother's/sister's/children's marriage. Maximum three times in service.
- Minimum service required: 7 years.
- Amount admissible: 50% of employee contribution.

5. 68(N) - Purchase of Equipment for Physically Handicapped
- Amount admissible: 6 times of basic + DA or employee contribution or cost of the equipment, whichever is less.

6. 68(NN) - Withdrawal Before Superannuation
- After attaining the age of 54 years and before one year from the date of superannuation, whichever is later.
- Amount admissible: 90% of both employee & employer contribution.

Regards,
Abbas.P.S

Abbas,

You have not answered his question. (I also want to know.) He has already purchased the plot. He took a bank loan. How can he legally, without falsifying records, take a loan from the PF account to pay back the loan? Or is it necessary that the advance from PF must be taken before buying?

Hi, you can apply for a partial withdrawal from your P.F. account for property purchase, which you don't have to return. However, make sure you are a member of the P.F. for at least 5 years, as such a withdrawal is permissible after 5 years of continuous membership of P.F.