Use Your EPF Amount to Pay Your EMI
Jun 02, 2017 Home Loan
There’s good news for all the employees who hold an Employee Provident fund (EPF) account will now to able to fund their EMIs with the help of money in the EPF account. The subscribers of Employee Provident Fund Organisation (EPFO) will now to able to withdraw 90 percent of their EPF money to fund the home loan and buy the home of their dreams. There are over four crore subscribers of the EPFO, who will be benefited from this move. Funding the home loan and paying them off is a difficult task. This step will further attract more customers.
A new paragraph – 68BD- has been added to the Employee’s Provident Fund (EPF) scheme, 1952. This will enable the subscribers to make down payments on their home loan.
According to the official statement, ‘the labour ministry has issued the notification for the purpose and the scheme stands amended’.
Under the new scheme, if the EPF subscriber is the member of a housing society or a co-operative with at least 10 other members, then he can withdraw up to 90 percent from the fund for the purchase of a house or flat, or there construction of the house or flat.
It also provides the subscribers an opportunity to pay off the outstanding loan or EMI to the concerned government authority, bank or any other lending institute.
Though there are certain guidelines for the taking the PF for the home loan EMI:
1. The person withdrawing the EPF amount to pay the home loans are supposed to be employed at least for three years.
2. The scheme is available for once in a lifetime. The subscribers won’t be able to withdraw money more than once.
This rule applies to all the subscribers who along with their spouses have at least Rs 20,000 in their account together.
This step will further encourage the buyers in buying the house. The prices and the monthly EMIs are the reason lot of potential buyers step away from buying a house or investing in the property. This year lot of changes has been brought in favour of the real estate sector to help and encourage more buyers.
There are certain tax benefits for the loan taken against PF.
1. Deduction in interest rates:
If you are the owner of the house, then the tax exemption up to Rs 2 lacs are given. If the entire house is rented, then the entire amount is exempted from taxation
2. Principle deduction:
Under section 80c of IT Act, a maximum deduction of Rs 1.5 lacs pa can be claimed by the owner.
3. Deductions on Registration and stamp duty:
Under the section 80c, benefits on stamp duty and registration can be claimed, but only for the year, you have paid the charges.
4. Benefits of being the first time home owner:
If you are a first time home buyer, then you can claim a tax benefit of up to Rs 1.5 lacs and a reduction in an interest payment of up to Rs 50, 000.
A new paragraph – 68BD- has been added to the Employee’s Provident Fund (EPF) scheme, 1952. This will enable the subscribers to make down payments on their home loan.
According to the official statement, ‘the labour ministry has issued the notification for the purpose and the scheme stands amended’.
Under the new scheme, if the EPF subscriber is the member of a housing society or a co-operative with at least 10 other members, then he can withdraw up to 90 percent from the fund for the purchase of a house or flat, or there construction of the house or flat.
It also provides the subscribers an opportunity to pay off the outstanding loan or EMI to the concerned government authority, bank or any other lending institute.
Though there are certain guidelines for the taking the PF for the home loan EMI:
1. The person withdrawing the EPF amount to pay the home loans are supposed to be employed at least for three years.
2. The scheme is available for once in a lifetime. The subscribers won’t be able to withdraw money more than once.
This rule applies to all the subscribers who along with their spouses have at least Rs 20,000 in their account together.
This step will further encourage the buyers in buying the house. The prices and the monthly EMIs are the reason lot of potential buyers step away from buying a house or investing in the property. This year lot of changes has been brought in favour of the real estate sector to help and encourage more buyers.
There are certain tax benefits for the loan taken against PF.
1. Deduction in interest rates:
If you are the owner of the house, then the tax exemption up to Rs 2 lacs are given. If the entire house is rented, then the entire amount is exempted from taxation
2. Principle deduction:
Under section 80c of IT Act, a maximum deduction of Rs 1.5 lacs pa can be claimed by the owner.
3. Deductions on Registration and stamp duty:
Under the section 80c, benefits on stamp duty and registration can be claimed, but only for the year, you have paid the charges.
4. Benefits of being the first time home owner:
If you are a first time home buyer, then you can claim a tax benefit of up to Rs 1.5 lacs and a reduction in an interest payment of up to Rs 50, 000.
Looking for property portal?
Related Articles
-
Important Tips for Taking Home Loan in 2018
Jun 12, 2018 -
How your Loan Depends On Your Age
Oct 26, 2017 -
-
See comments (0)
Write a comment
