Renovate or repair you Home with EPF Money

Your home demands some repairs or renovations if there are some damages or if you want to change the look of your home as per your preference. These repairs or renovations are a costly affair. They might involve lakhs of rupees which might not be possible for you to fund. There are home loans and personal loans to offer you the required funds but these loans charge you additional interest. What if you can use your EPF funds for financing the repairs or renovations of your home?

EPF Money

The Employees’ Provident Fund is a fund wherein you and your employer contribute 12% of your salary (basic salary + dearness allowance) in order to create a fund for your retirement. Though EPF contributions are supposed to be used after you retire, there are provisions in the scheme for partial withdrawal of funds for specific purposes. Renovating or repairing your home is one such purpose for which you can use your EPF investments. Let’s understand how –

EPF withdrawal for home renovations and repairs

Partial withdrawal from EPF account is allowed subject to certain terms and conditions. These terms and conditions include the following – 
      You can withdraw a maximum of 12 times your monthly salary (basic + dearness       allowance) from the EPF account for repairs and renovations of the home
      The actual amount which you can withdraw would be lower of the cost of renovations, 12 months’ salary or your contribution to the EPF scheme.
      The cost of interior decoration would not be included in the cost of repairs             or renovation when calculating the maximum amount of withdrawal from      the fund
      You should have contributed to the EPF account for at least 5 years to become eligible for withdrawal. This means that a minimum service of 5 years must be rendered with EPF contributions for 5 complete years for partial withdrawals from EPF account to be permitted.
      The house should have been constructed at least 5 years before the date of withdrawal. This means that withdrawals are allowed for homes which are 5 or more than 5 years old.
      Only one withdrawal is allowed for repairs or renovations of the home. Even if 5 or more years have elapsed from the date of the last withdrawal, you wouldn’t be allowed to withdraw again for renovations or repairs of the house.
      The house on which repairs or renovations are being done should be in the name of the employee solely or jointly with his/her spouse
Documents required for withdrawals
For withdrawing from the EPF account, you would need to submit the following documents –
      EPF withdrawal form which should be duly filled      
      Copy of your Aadhar card
  A cancelled cheque of your bank account for bank details wherein the money would be transferred.
Benefits of using EPF money
      You don’t have to pay interest. The amount you use is the amount which you have invested
      Withdrawal process is simple and money is credited to your account quickly
      The remaining account continues to grow for retirement

So, if home renovations or repairs are on your mind, use your EPF account balance to fund them.

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  1. A home loan is an amount of money that an individual (borrower) borrows from a bank or financial company or money lending company at a certain rate of Intrest to be paid on EMI based every month. In order to sanction loan, the lending company or financial company takes the Individual’s property as a security purpose. The property can be either commercial or personal in nature. In a home mortgage (home loans), the borrower ( the individual who are getting the loan from the lender) transfers the title to the lender on the condition that the title will be given back to the owner once the payment has been made and all other terms of the mortgage have been met. When the borrower cannot pay the dues, the lender possesses all the legal rights to recover the pending loan amount by sale of the property.

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