Realty Push: Home loans to NPS subscribers

    Home Loans to NPS
    In an encouraging development, which will inject a major push to the country's real estate segment, the Pension Fund Regulatory & Development Authority (PFRDA) is preparing a blueprint allowing NPS funds to be used to support home loan needs of subscribers. The regulator feels, an NPS subscriber should be allowed to use the NPS corpus either directly or as collateral for financing the house. This will be an improvement over the current regime, where any premature withdrawal means diminishing of balance, said PFRDA member, RV Verma, adding that the regulator is preparing a paper on 'Housing for NPS Subscribers'. Rather than allowing NPS contributions to flow into the capital market or specified securities, the same could also be used for supporting home loan needs of NPS subscribers. Any move to allow pension funds to be used for financing a home is expected to 'reduce homelessness' in the country and is in line with the government's objective of 'Housing for All by 2022'. This facility will be available across the entire NPS subscriber universe — both government employees and non-government individual subscribers. This idea of allowing NPS monies to fund home purchase could be a win-win for the government and subscribers. Besides pension and a house, subscribers will also get fiscal benefits by way of tax breaks for contributing to the NPS corpus and also for repayment of housing loan principal and interest, he added.
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