Corporate NPS

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Corporate NPS

What is Corporate NPS?

Corporate NPS is designed for all organizations including Private Companies, PSUs, CPSEs, etc.

This facilitates corporate entities and other registered bodies to offer their existing and prospective employees the option to open NPS account within purview of their employer-employee relationship and avail its benefits.

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Benefits to Employer

  • Corporate NPS helps employers to gain the goodwill of their employees over and above their PF’s contribution.
  • Enables employees to build their retirement corpus by becoming a co-contributor to their pension.
  • No administrative cost and hassle-free record-keeping.
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Rolling out the Corporate NPS program in your organisation

  • Corporate can join NPS through any one of the existing Point of Presence (POP).
  • Employees in the organized sector who work for a company registered under Corporate NPS are eligible to join Corporate NPS.
  • It is a voluntary contribution plan in which the employer makes periodic payments to the employee's NPS account on their behalf.
  • Employees in both the public and private sectors can join NPS through the corporate method.
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Tax Benefits to Employees

  • Employee (Self) Contribution Tax Benefit: Tax deduction benefit of up to 10% of salary (Basic + Dearness Allowance) can be availed u/s 80 CCD (2) up to Rs. 1.5 lakh limit in a fiscal under Section 80 CCE of the Income Tax Act, 1961.
  • Employer Contribution Tax Benefit: Employer contributions under tax old regime to NPS Tier 1 account up to 10% of the employee’s salary (Basic + Dearness Allowance) under the corporate NPS qualifies for an additional tax deduction. Under new tax regime employer contribution has been increased to 14% of Basic + Dearness Allowance.
  • Employee (Self) Contribution Tax Benefit under Section 80 CCD (1B): In addition to the tax benefits of corporate NPS contribution discussed above, Tier 1 accounts can claim an additional deduction of up to Rs. 50,000 under Section 80 CCD (1B).
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How to join Corporate NPS?

Joining NPS is made very easy and by following 3 simple steps you can start your retirement planning:

  • Click here to fill in your personal details.
  • Upload your PAN, Copy of your signature and cancelled cheque.
  • Make online investment and your PRAN is created.

Frequently Asked Questions on Corporate NPS?

Here are some frequently asked questions about Corporate NPS

NPS Related FAQs

National Pension System (NPS) is a pension scheme initiated by the Government of India with the ambition to create a pensioned society in the country. The Scheme is regulated by Pension Fund Regulatory and Development Authority (PFRDA).

Any individual, whether Indian resident or non–resident can join the Scheme subject to following conditions:

  • One should be between 18 – 70 years of age as on the date of submission of the application.
  • One should comply with the prescribed Know Your Customer (KYC) norms as detailed in the Subscriber Registration Form for NPS.

Yes. NRIs and OCIs are also allowed to join NPS.

One can have only one active PRAN at a time.

Tier I Vs Tier II

Tier II NPS account is optional. Subscriber can open Tier II NPS account post opening their Tier I account.

No. Individual cannot apply for only Tier II NPS Account, it can be opened while creating NPS account or later once Tier I is opened.

NPS Account maintenance

Yes. A Subscriber needs to submit the request, along with the Service Charge of Rs.30 plus GST, to us for initiating the modification to their PoP. Alternatively, they can also update their profile using the App provided by CRA.

Yes. A Subscriber can place request for issuance of duplicate PRAN Card. Charges will be deducted by CRA for issuing duplicate PRAN Card.

Yes. Monthly statement, containing details of the unit holdings, is issued by CRA to Subscriber’s registered email address.

Subscriber can view / print the SOTs by logging into CRA website using their PRAN and password.

The Subscriber must have the following scanned documents readily available to start the online NPS registration process:

  • Passport Size Photo in colour
  • Self-attested scan copy of PAN
  • Self-attested scan copy of Address Proof
  • Scanned Copy of Cancelled Cheque
  • Scanned copy of Subscriber’s Signature specimen

Subscribers can start the process by visiting the NPS site shared by their HR team.

No, the POP charges would be deducted from the Contribution amount.

Services like profile modification, changes in investment portfolio, changes in sector, etc. are called non–financial transactions.

Subscriber needs to pay Rs.30 + GST by Cheque at the time of submitting request to process any Non – Financial transactions.

Contribution towards NPS

Subscriber can contribute towards NPS directly using the NPS app provided by CRA.

If a Subscriber opts for only Tier I account through Corporate, there is no initial contribution required at that time. However, if the Subscribers opt for Tier I + Tier II, then they need to deposit Rs.1000/-plus GST.

  • Voluntary contributions can be deposited by using NPS app by CRA.
  • Employer contribution is processed through the Employer. For more information you can reach out to your subscriber benefit team.

Subscriber has the flexibility to contribute anytime they want. There are no restrictions on the number of times one can invest.

Employer’s contribution is deposited only in Tier I account.

Yes, NPS offers this flexibility. One can decide the contribution amount as per their planning.

Yes, you can start your SIP by opting for D-Remit, the NPS app by CRA.

Investment of Funds under NPS

NPS offers 4 funds to subscriber - Equity (E), Corporate Bonds (C) Government Securities (G) and Alternate Investment (A).

NPS restricts investment towards Equity to up to 75% of contribution amount for Tier I. However, a subscriber can invest up to 100% in Corporate Bonds or Government Debt Funds. Alternate Investment fund option is there for Tier I NPS accounts only and with a restriction of 5%. You can invest 100% towards Equities Funds in Tier II.

Yes. The Subscriber can exercise this option of changing their scheme preference four times in a financial year.

Unfreezing Your PRAN

In case of a situation where your PRAN is frozen due to contribution of less than Rs.1,000 in a year, then you need to write to your PoP to activate your PRAN so that you can make the contribution. Once the PRAN is active, subscriber needs to contribute a minimum of Rs.500.

Tier II does not freeze as it is voluntary account. However, if Tier I account is frozen, then further investments in Tier II will not be accepted.

Withdrawal from NPS Account

Withdrawal from Tier I NPS account would be permitted for specific purposes like child’s marriage, higher education, treatment of critical illnesses, etc. One can only withdraw from the total voluntary contribution done by them.

Subscriber can initiate the request online using login ID and Password provided by CRA to access NPS details.

Exit from NPS

A subscriber can pre-exit from NPS after 5-years of account opening or the attainment of superannuation age (retirement age).

Primary objective of Tier I NPS Account is to help the subscriber create a Corpus which can be used at the time of retirement to buy pension for the Subscriber.

Exit before retirement Exit on retirement
  • Up to 20% of Corpus can be withdrawn in lump sum
  • Balance amount needs to be invested in Annuity
  • If the Corpus is less than or equal to Rs.2.5 lakh, the subscriber can withdraw the full corpus
  • These withdrawals are tax free
  • Up to 60% of Corpus can be withdrawn in lump sum
  • Balance amount needs to be invested in Annuity
  • If the Corpus is less than or equal to Rs.5 lakh then entire corpus can be withdrawn tax free in lump sum

In case of exit from NPS at retirement age, the Subscriber can choose to defer the annuity / withdrawal as per the prevailing rules.

However, in case of pre–mature exit from NPS (before attaining the age of retirement), the Subscriber does not have option to defer.

The fund would continue to remain invested as per the choice of the subscriber as these were at the time of vesting.

Investment in Annuity

In case of pre-mature exit, the Subscriber needs to invest in Annuity immediately. Depending on the Annuity Plan one has invested in, annuity would start.

Subscriber can choose the ASP at the time of exit. Once the pension starts, then the subscriber cannot change the ASP.

Yes. A Subscriber can use 100% of corpus to buy annuity.

It will depend on the kind of annuity plan opted by the Subscriber. It is important for subscribers to understand the rules and options available to them under various annuity options.

In case of untimely Death

In case of death of the Subscriber, nominee can claim the entire corpus of the subscriber.

The nominee needs to submit a withdrawal request to the PoP. After the request is processed, a Cheque is issued to the nominee.

No. Death proceeds in the hands of Nominee is tax free.