EPF Withdrawals Simplified: Know When to Access Funds & The Hidden Costs
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Moneycontrol•05-01-2026, 19:02
EPF Withdrawals Simplified: Know When to Access Funds & The Hidden Costs
- •EPFO simplified EPF withdrawals from 13 categories to 3: essential needs, housing needs, and special circumstances, aiming for clarity.
- •Full withdrawal is allowed at retirement (age 58), voluntary retirement, permanent disability, migration abroad, or unemployment (75% immediately, rest after 12 months).
- •Partial withdrawals are permitted for housing (up to 90% after 5 years), medical emergencies (no service limit), marriage/education (50% after 7 years), and pre-retirement (90% at age 54/1 year to retirement).
- •Withdrawals are tax-free if 5 years of continuous service are completed; otherwise, TDS applies (10% with PAN, max marginal rate without PAN).
- •Early withdrawals incur a hidden cost: loss of compounding, as EPF earns over 8% annually, impacting long-term retirement savings.
Why It Matters: Simplified EPF withdrawals offer flexibility but can weaken retirement savings if not used thoughtfully.
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