EPFO Big Update: If you are a salaried employee, you might receive some good news next year, in 2026.  EPFO ​​is preparing to make its system easier and faster than ever before. In the coming times, the process of withdrawing money from EPF will become completely digital, simple, and transparent. This will make the process much easier for those who previously found EPF withdrawals complicated.

In 2025, EPFO ​​made significant changes to the withdrawal rules. Previously, there were 13 different reasons for withdrawing money from EPF, but now these have been categorized into just three categories: essential needs, housing-related needs, and special circumstances. This change has made it easier for employees to understand why and how much money they can withdraw.

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When can you withdraw your entire EPF amount?

The purpose of EPF is to provide financial security after retirement, but in some specific situations, withdrawal of the entire amount is permitted. If an employee completes 58 years of age or takes voluntary retirement, they can withdraw their entire EPF.

In addition, the full amount can also be withdrawn in cases of permanent disability, inability to work, permanently settling abroad, or prolonged unemployment. In case of unemployment, 75 percent of the amount can be withdrawn initially, and the remaining 25 percent is received after 12 months.

Facility for partial withdrawal before retirement

EPFO rules also allow employees to make partial withdrawals as needed before retirement. For buying or building a house, a minimum of 5 years of service is required. A 10-year service condition is stipulated for repaying a home loan.

There is no minimum service period required for medical treatment. Money can be withdrawn after 7 years of service for marriage or children’s education. After the age of 54, an employee can withdraw up to 90 percent of their EPF before retirement.

Rules are essential to avoid taxes

Tax rules are very important when withdrawing money from EPF. If an employee has completed 5 years of continuous service, the entire amount withdrawn is tax-free. However, if the money is withdrawn before 5 years, TDS (Tax Deducted at Source) is deducted. A TDS of 10 percent is applicable if a PAN card is provided, and more than 34 percent if a PAN card is not provided.

What’s new in 2026?

EPFO is working towards making its system completely digital and automated. It is expected that by 2026, with KYC updates, the money will be credited directly to the account within a few hours without any manual intervention. AI-based verification and simplified online forms can make the claim process much faster than before.

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Make a wise decision

Although the rules are becoming simpler, it is important to understand that withdrawing money from EPF affects future savings and compounding. It is better to make partial withdrawals only when necessary, and priority should be given to transferring the EPF account when changing jobs, so that a strong fund can be built for retirement.