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PF account, in general perception, signifies a balance, available after retirement or resignation from a current organization. So at times, while in continuation of service, if someone require funds, they generally opt for more popular source of funds such as personal loans, home loans etc, without even giving a thought that a more reliable source is also available, by way of your PF account balance. Sometimes, one use to avoid this source of fund, may be due to lack of clarity or may be because, he/she is not sure, whether he/she will can get money out of it or not. My effort is just to clear some mist over this entire issue.
The PF members are eligible to withdraw advance loan from their PF Account. However, there are some specified criteria / directions & procedures for this. This facility can be availed for purposes like marriage, education, medical treatment etc, subject to the prescribed conditions as mentioned here below. It may be noted that such advance is totally tax-free and interest-free.
The specified purposes & conditions are listed below :
· Bonafide certificate duly indicating the fees payable from the educational institution.
· Only for self, spouse, son, daughter, dependent father & mother
· For this purpose, no minimum service is required.
· Incase of TB or leprosy etc, a specialist doctor should certify the same
· Maximum amount given is 6 times of monthly wages or full employee share, whichever is less.
Purchase of Site for Construction of House there on
Construction of House
Purchase of Flat/House
Renovation / Modification in House
Repayment of Loan
· Loan must be taken from state Govt, Regd Co-operative Society, State Housing Board, Nationalized Bank and Public Financial Institution.
Advance in Abnormal Condition
· Loan is also allowed in abnormal conditions like Natural calamities etc.
Grant Of Advance To Members Who Are Physically Handicapped
· To Physically Handicapped member for purchase of an equipment required to minimize the hardship on account of handicap.
· Basic wages+ DA for six months or own share of contribution with interest or cost of equipment which ever is least.
· Production of medical certificate from a competent medical practitioner to the effect that he is physically handicapped
Please note that the amount of advance or withdrawal is not required to be refunded back into the account under normal circumstances. However, if the amount is not utilized for the specified purpose, then the same will need to be refunded with penal interest.