Salaried employees are expected to get major relief in 2026. The Employees’ Provident Fund Organisation (EPFO) is planning to simplify its online system.
This will make EPF withdrawals faster, easier, and more transparent. If the withdrawal process felt complicated earlier, it is set to become much simpler in the coming years.
EPFO Withdrawal Rules Simplified in 2025
In 2025, EPFO made an important change to its withdrawal rules. Earlier, there were 13 different reasons for withdrawing EPF money. Now, these have been reduced to just three categories:
Essential needs
Housing needs
Special circumstances
This change helps employees clearly understand when and how much EPF money they can withdraw.
When Can You Withdraw the Entire EPF Amount?
EPF is mainly meant for financial security after retirement, but full withdrawal is allowed in certain situations:
On reaching the age of 58
On voluntary retirement
In case of permanent disability or inability to work
When settling abroad permanently
In case of unemployment (75% can be withdrawn immediately, and the remaining 25% after 12 months)
Options for Partial EPF Withdrawal
EPFO rules also allow partial withdrawals before retirement for specific needs:
To buy or build a house: After 5 years of service
To repay a home loan: After 10 years of service
For medical treatment: No minimum service period required
For marriage or higher studies: After 7 years of service
After the age of 54: Up to 90% of EPF can be withdrawn before retirement
Tax Rules You Must Know Before Withdrawing EPF
Tax rules play an important role in EPF withdrawals. If you complete five years of continuous service, the entire EPF withdrawal is tax-free. However, if you withdraw before completing five years, TDS will be applicable:
10% TDS if PAN is provided
More than 34% TDS if PAN is not provided
What Will Change in 2026?
EPFO is working towards a fully digital and automated system. By 2026, EPFO claims that EPF money could be credited to bank accounts within hours after KYC updates, without manual intervention.
AI-based verification and simplified online forms will further speed up the claim process.
Think Wisely Before Withdrawing EPF
Even though the rules are becoming simpler, it is important to understand the long-term impact of withdrawing EPF money. EPF benefits from long-term savings and compounding.
Withdraw only when necessary, prefer partial withdrawals, and always ensure EPF transfer when changing jobs.
