EPFO Latest Update – In July 2025, the Employees' Provident Fund Organisation (EPFO) announced a major rule change that will benefit millions of salaried individuals who are planning to buy a house. According to the EPFO new rule 2025, members of the Employees' Provident Fund can now withdraw up to 90 percent of their EPF balance to pay for a house purchase. This includes down payment, EMI, or home loan settlement.
Let us understand what has changed, how it benefits
employees, what conditions apply, and how you can apply for the withdrawal
online. This detailed guide covers all essential points including PF
withdrawal for home loan, the process involved, tax status, eligibility,
and common questions.
What Are the New Rules of EPF Withdrawal for Housing
Under the newly updated guidelines, EPFO now allows
withdrawal of 90 percent of the EPF corpus for purchasing a
house. Earlier, this percentage was much lower and came with more restrictions.
Now, members can access their PF funds more conveniently and use it to buy a
new house, make a down payment, repay a home loan, or even pay EMIs.
The key highlights of the EPFO latest update are:
- Members
have the option to utilise 90 percent of their PF balance
for housing purposes.
- The
withdrawn amount can be used for home loan repayment, down payment, or EMI
- This
facility is available only one time during a member’s
entire career.
- EPF
account must be at least three years old
- Member
must be a regular employee with contributions for the last three years
- No
need to upload passbook or cheque images for online claim
- Aadhaar
and bank account information must be properly linked to the UAN.
PF Withdrawal for Home Loan: Who Is Eligible
To withdraw PF advance for home purchase, employees must
meet the following criteria:
- The
PF account must be active and at least three years old
- The
member should have completed continuous service and contributions during
this period
- The
withdrawal is allowed only once for buying a house
- The
applicant must ensure the property is registered in their name or jointly
with their spouse.
- Aadhaar
and bank account must be correctly seeded with UAN
- The
housing advance is only for buying or constructing a house or flat
The earlier rule required a minimum of five years of service
to withdraw PF for housing purposes. Now, with only three years of
contributions, members can access a large portion of their PF savings. This is
a big relief for many young employees and first-time home buyers.
Online PF Withdrawal Process for Buying a House
The PF withdrawal process for home loan
purposes is fully digital and can be completed through the EPFO member portal.
Here is the step-by-step process:
1. Login to the UAN Member Portal
Go to the EPFO’s official website and sign in with your UAN
and password.
2. Go to Online Services
Once logged in, navigate to the ‘Online Services’ section
and choose the option for ‘Claim (Form‑31, 19, 10C)’.
3. Enter Your Details
Confirm your bank account and Aadhaar-linked mobile number.
Your Aadhaar-linked phone will receive an OTP for authentication.
4. Choose the Reason for Withdrawal
Select ‘PF Advance (Form-31)’ and choose ‘Housing’ as the
reason for withdrawal.
5. Enter Withdrawal Amount
You are allowed to apply for up to 90 percent of your PF
balance. Specify the required amount and proceed to submit.
6. Verification and Approval
If your KYC is verified, the claim will be automatically
processed. The money will be transferred to your bank account or directly to
the housing agency or bank in case of EMI or loan repayment.
For claims below a certain limit, EPFO has introduced
auto-approval. The updated system allows for quicker handling by removing
manual verification stages.
Is PF Withdrawal for Home Loan Taxable
This is a common question among salaried employees. The
answer is:
No, PF withdrawal for home loan is not taxable if
it is used for approved purposes such as home purchase, construction, or loan
repayment, and the account has been active for at least five years.
If the withdrawal is made before completing five years of
service, and it does not qualify under approved purposes, then TDS may
be applicable. However, for housing-related withdrawals under the current
rule, tax is generally not deducted.
Also, there is no tax on the interest earned on the
withdrawn amount if the withdrawal is non-taxable.
Key Benefits of the New EPFO Rule
The EPFO new rule 2025 is a progressive
move aimed at making homeownership easier for salaried individuals. Here are
some benefits:
- Higher
access to savings: Employees can now use a bigger portion of their own
retirement savings for a critical life goal like homeownership.
- Helps
with down payment or EMI pressure: Rising property prices often make
it hard to afford a down payment. PF funds can help bridge that gap.
- Faster
online processing: The process is now fully digital and faster due to
reduced documentation and instant KYC verification.
- Encourages
home buying: With easier access to funds, more people are likely to
invest in homes, which also helps revive the housing sector.
Should You Use Your PF for Home Loan
While the PF advance for home purchase is a
helpful facility, employees should use it with careful planning. Withdrawing a
large portion of your PF affects your retirement savings. Before withdrawing,
consider:
- Consider
if you have alternative means to cover the down payment.
- Your
long-term financial goals and retirement plans
- Whether
the home is a necessity or a financial liability
- Consider
how the withdrawal might affect your future EPF growth and compounding
returns.
For first-time homebuyers with limited resources, using PF
funds may be a smart move. But it should not be the first option if you can
manage without touching your retirement funds.
Read also : EPFO Doubles Withdrawal Limit for Medical Treatment to Rs 1 Lakh
Public FAQs
Can I withdraw my PF for a home loan?
Yes, under the new rule, you can withdraw up to 90 percent
of your PF balance for purchasing a house, including EMI payments.
What is the best reason to withdraw PF?
Home purchase, medical emergencies, and children's education
are considered legitimate reasons. Among them, housing is often the most
financially impactful.
Is it good to withdraw PF for a home loan?
It is helpful if you are short on funds, but it reduces your
retirement savings. Use it only when necessary.
What are the criteria for PF withdrawal for a home loan?
The EPF account must be three years old, KYC must be
completed, and this withdrawal can only be availed once in your lifetime.
How much EPF can I withdraw for my house?
You can withdraw up to 90 percent of the total PF balance
including employer and employee contributions plus interest.
Is PF withdrawal for home loan repayment taxable or not?
No, if it is withdrawn under the permitted rules and for the
purpose of buying or constructing a house, it is not taxable.
Read also : EPFO Profile Update Rules Changed: Easier Updates for PF Members
Summary
The EPFO latest update allowing up to 90
percent withdrawal from the PF account for housing needs is a big step towards
supporting middle-income homebuyers. By easing restrictions and digitising the
claim process, EPFO is helping lakhs of salaried individuals turn their
homeownership dreams into reality.
This rule is especially useful for first-time buyers who
often struggle to arrange large down payments. However, using retirement
savings early should always be a carefully considered decision.
If you are planning to buy a house and meet the eligibility
criteria, this PF withdrawal facility can make the process easier and more
affordable.
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