When employee provident fund (EPF) withdrawal becomes taxable
- Income tax laws are designed to discourage early EPF withdrawal
- In some cases, income tax laws offer some relaxation on EPF withdrawal
Financial planners advise against early withdrawal of employee provident fund or EPF savings as they are are meant for retirement years. Still, you should know the income tax implications of EPF withdrawal. Income tax laws are designed to discourage early EPF withdrawal. Salaried individuals contribute 12% of their salary towards their EPF account and the employer matches the contribution. The contributions earn interest according to the interest rate declared by the retirement fund body EPFO or Employees' Provident Fund Organisation every year.
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