Which of the following statements is true regarding Tax-Free Savings Accounts (TFSA)?

The statement that re-contributions after withdrawal are permitted is true regarding Tax-Free Savings Accounts (TFSA). When funds are withdrawn from a TFSA, those amounts are added back to the individual's contribution room for the following calendar year, allowing them to recontribute that same amount without penalty. This feature makes TFSAs an attractive savings option, as individuals can effectively manage their contributions and withdrawals based on their financial needs.

The TFSA is designed to provide flexibility; unlike some other accounts, withdrawals do not affect the tax-free status of the investments while they remain in the account. Therefore, individuals can withdraw funds for any purpose and later re-contribute the same amount when their financial situation allows. This mechanism supports a dynamic approach to saving and investing, catering to changes in personal circumstances without the concerns of taxes on returns earned during the time the funds were invested.