Invest in Your People
Pension & Tax Benefits

Corporate NPS is an employee pension scheme for commercial entities like companies, LLPs, cooperative societies, any alike. They basically registers as an employer with a Central Recordkeeping Agency (CRA), through a PFRDA-registered Point of Presence (POP) such as Religare Broking to offer National Pension Scheme to its employees.

Once registered, the employer can:

• Enrol eligible employees under individual Permanent Retirement Account Numbers (PRAN)
• Contribute to employee NPS accounts as part of the CTC structure
• Run NPS alongside existing retirement benefits such as Provident Fund (PF) and Superannuation Fund
• Migrate an existing approved Superannuation Fund into the NPS architecture, subject to PFRDA guidelines

Corporate NPS removes the administrative burden of managing a trust-based pension scheme as there is no trust to maintain, no separate record-keeping infrastructure, and no annuity processing responsibility on the employer.

Benefits for Companies Adopting Corporate NPS

Corporate NPS helps employers (or companies) to strengthen retirement benefits and control CTC costs. PFRDA data shows a sharp rise in both new corporate subscribers and the number of employers registering to offer the scheme, reflecting growing recognition of NPS as a cost-efficient alternative (or supplement, in many cases) to traditional superannuation structures.

Tax Benefits for Employers & Employees

For the Employer:

Business expense deduction

Contribution to employee NPS accounts is deductible under Section 36(1)(iv-a), up to 10% of employee salary (Basic + DA)

No trust overhead

No need to set up or maintain a separate pension trust, unlike traditional superannuation funds

Talent & retention lever

A structured retirement benefit strengthens the overall compensation package

For the Employees:

For Employees

Employer Contribution Deduction

Under Section 80CCD(2), employees can claim a deduction on the employer's contribution to NPS, subject to the applicable limit:

• New Tax Regime: Up to 14% of salary (Basic + DA) for private-sector, PSU and government employees.
• Old Tax Regime: Up to 10% of salary (Basic + DA) for private-sector, PSU and other non-government employees, and 14% for Central and State Government employees.

Additional Voluntary Contribution

Under the old tax regime, employees can claim an additional deduction of up to ₹50,000 for their own NPS contribution under Section 80CCD(1B), over and above the ₹1.5 lakh limit under Section 80CCE. This deduction is not available under the new tax regime.

Portability

An NPS account is portable. The employee's PRAN (Permanent Retirement Account Number) remains the same when they change jobs, allowing them to continue their NPS account and accumulated retirement savings.

How does the Corporate NPS Model Work

Employer Registration The organisation submits a Corporate Registration Form through a PFRDA-registered POP to register with the Central Recordkeeping Agency (CRA) under the NPS Corporate Sector Model.

• Employee Enrolment: Eligible employees are enrolled and issued a PRAN. KYC is completed for each employee.
• Contribution Structuring: The employer defines the contribution model, equal, unequal, or employer-only and the frequency of contribution uploads.
• Ongoing Administration: The POP facilitates contribution uploads, withdrawal/exit processing, grievance resolution, and updates to employee records on the employer's behalf.

Eligibility for Corporate NPS

Here is the list of entities that are eligible to register under the Corporate NPS Model:

• Companies registered under the Companies Act, 2013
• Cooperative societies registered under applicable state or central law
• Bodies established under an Act of Parliament or State legislature
• Public Sector Enterprises / Government companies
• Foreign companies with Indian operations, in respect of eligible Indian employees
• Foreign / diplomatic missions operating in India

Further, the employees must qualify the following eligibility criteria:

• Must be Indian citizens (Resident, NRI, or OCI) employed by a registered corporate entity
• Must complete KYC as part of enrolment
• Enrolment is routed through the employer, not directly by the employee