What you need to know if you are planning to withdraw your EPF money to buy a house
The intent of the present Government is clear - affordable housing for all. It seems as if the Ministry of Labour and Employment is resonating the ideology of the Government. Towards this initiative the Ministry of Labour and Employment has come out with a Press Release on March 16, 2017 enabling Employee Provident Fund ("EPF") members to withdraw up to 90 per cent of fund lying in their account for purchase of dwelling house/ flat or construction of dwelling house/ acquisition of site. A
As per the subject Press Release, this proposal was tabled before Rajya Sabha.
The existing provisions allow withdrawal of EPF balance for purchase of dwelling house/ flat or construction of dwelling house/ acquisition of site subject to certain conditions and limitations. The proposed amendment seems to liberalise the existing provisions to enable the salaried class to realise their dream of purchasing a home at an earlier stage.
Why is everyone talking about affordable housing?
Urbanisation and housing reveal a nation’s economic growth and social wellbeing. India’s urban population is growing at an average 2.1% every year since 2015. It is likely to reach 60 crore by 2031 (up from 37.7 crore today). But the growth in housing has been unable to keep pace. Currently, the housing shortage in India is close to 1.9 crore units. The economically weaker sections (EWSs) and lower-income groups (LIGs) account for 96% of the urban shortage.
The Government of India has recognised the need to fill the gap in urban housing. Large-scale housing projects that are affordable are sure to help. So, the government announced an ambitious project. It seeks to provide ‘Housing for All by 2020’. It has taken many initiatives to make this a reality. For example, it facilitated a 4% interest rate rebate on housing loans of up to Rs 9 lakh. The rebate stands at 3% on loans up to Rs 12 lakh.
Besides, the government granted infrastructure status to affordable housing. Developers can enjoy cheaper sources of funding, including external commercial borrowings (ECBs). Affordable housing promoters will also get more time for project completion. The deadline will increase to five years, up from the current three years.
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