Investment Option

How to open NPS account

Corporate Benefit

Pension Fund Regulatory and Development Authority of India (PFRDA) has introduced ‘Corporate NPS’ model to enable corporates to offer NPS investment benefit to all employees. This offer is within the purview of their employer – employee relationship.

Corporate Benefits

  • Corporates does not bear any administrative or fund management charge while offering NPS to employees

  • Trust formation is not requires for NPS set up in the company.

  • Employees can be added and removed from NPS scheme with a simple process.

  • As an employer, you have the option to decide the NPS options for the employees, like percentage contribution, duration of opt in/opt out, etc. You may also choose to offer NPS as voluntary scheme to all employees or a select group of employees.

  • NPS is voluntary for private sector and can be run concurrently with any other retirement benefit programme implemented by the corporate

  • SA Fund transfer – NPS account holders can transfer their Superannuation funds to their NPS account without any tax implication. (Post relevant authorities approvals)

Additional corporate Tax benefit

  • As a corporate NPS account holder you can invest maximum upto 10% of the employees’ basic salary + dearness allowance via your employer. This investment can be claimed tax exempt by the employee under Section 80CCD(2) of Income Tax Act of 1961. There is an absolute amount wise cap of Rs. 7,50,000 introduced on the employer contribution of PF (Provident Fund), SA (Superannuation) and NPS (National Pension System).

  • As an employee you can claim tax exemption upto Rs. 50,000 under section 80CCD (1B). This benefit is over an above limit of Rs. 1,50,000 under section 80C.

  • You may invest upto 10% of your basic salary + dearness allowance and claim tax exemption on the invested amount under section 80CCD(1). This tax exemption is subject to a limit of Rs. 1,50,000 under section 80C of Income Tax Act, 1961.

Illustration -

If employee has basic salary of Rs. 10,00,000 he invests Rs. 1,00,000 to his NPS through employer contribution. U/s 80CCD(2) the employee is eligible to save this additional Rs. 1,00,000 as tax exempt. Considering the employee falls in the 30% tax bracket, the employee will save approx. Rs. 30,000 of tax payment for one Financial Year.

Services offered by HDFC Bank as a Point of Presence (PoP)

  1. Corporate Registration

  2. NPS Implementation/ planning at corporate level

  3. Employee NPS Awareness Sessions

  4. Employee Enrolment online through Bank’s website

  5. Processing Employer / Employee Contribution

  6. Dedicated desk for Query handling / other services

  7. Switch / Withdrawal / Scheme Change / PFM Change / Sector Shifting etc.

Contact your HDFC Bank relationship manager for further assistance.