Why Corporate NPS is a Win-Win for Employers & Employees
As a forward-thinking corporate leader, you understand the importance of employee financial wellness. The National Pension System (NPS) Corporate Model is a powerful retirement benefit that not only helps employees build a secure future but also offers significant tax advantages for your organization.
By implementing Corporate NPS, you can:
✔ Reduce tax liability under Section 36(1)(iv)(a) of the Income Tax Act.
✔ Enhance employee retention with a structured retirement plan.
✔ Boost employer branding as a company that cares for long-term employee welfare.
Let’s explore how Corporate NPS works and why your organization should adopt it.
How Does Corporate NPS Work?
The Corporate NPS model allows employers to contribute to their employees’ NPS accounts alongside employee contributions. Here’s how it functions:
- Employer Registration – The company registers under the Corporate NPS model with a Pension Fund Manager (PFM).
- Employee Enrollment – Employees open PRAN (Permanent Retirement Account Number) and opt for the NPS scheme.
- Contributions – Both employer and employee contribute monthly/annually.
- Investment Growth – Funds are invested in equity, corporate bonds, and government securities.
- Tax-Free Withdrawals – At retirement, employees can withdraw up to 60% tax-free, while the remaining 40% must be used to purchase an annuity.
Tax Benefits of Corporate NPS
For Employers:
✅ Deduction up to 10% of Salary (Basic + DA) – Under Section 36(1)(iv)(a), employer contributions are deductible from taxable income.
✅ No additional cost burden – Unlike EPF, NPS offers flexibility in contribution amounts.
For Employees:
✅ Additional ₹50,000 Deduction – Under Section 80CCD(1B), employees get extra tax savings beyond the ₹1.5L limit under 80C.
✅ Tax-Free Employer Contributions – Up to 10% of salary (Basic + DA) is tax-free under Section 80CCD(2).
Why Should Your Company Implement Corporate NPS?
- Attract & Retain Talent – Employees value companies that invest in their future.
- Cost-Effective Retirement Plan – Lower administrative burden compared to EPF.
- Better Returns Than Traditional Schemes – NPS offers market-linked returns, outperforming many fixed-income options.
- Corporate Social Responsibility (CSR) Alignment – Promotes financial security, aligning with ESG goals.
How to Get Started with Corporate NPS?
Implementing NPS in your organization is simple:
- Choose a POP (Point of Presence) – Banks or financial institutions can facilitate registration.
- Educate Employees – Conduct sessions to explain benefits.
- Automate Contributions – Integrate payroll with NPS for seamless deductions.
Conclusion: Secure Your Employees’ Future & Save Taxes!
Corporate NPS is not just a retirement plan—it’s a strategic HR and financial decision that benefits both your company and employees. With attractive tax savings, higher returns, and employee satisfaction, NPS is a must-have in your benefits portfolio.
📞 Contact us today to set up Corporate NPS for your organization and enjoy a hassle-free, tax-efficient retirement solution!
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🔹 Download our Corporate NPS Guide for detailed insights.
🔹 Speak to our NPS experts – Email us at info@metainvestment.in or call +91-9309806281.
