Features

NPS Vatsalya

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

  • Investment up to 10% of Salary (Basic + Dearness Allowance) routed through the Employer, is deductible from taxable income u/s 80CCD (2) of Income Tax Act, 1961 which is over and above Rs. 1.5 lakhs limit of section 80C under Old Tax Regime.

  • Additionally, investment up to Rs.50,000 is deductible from taxable income u/s 80CCD (1B) of Income Tax Act, 1961 under Old Tax Regime.

  • Employees opting for New Tax regime, can choose up to 14% of Salary (Basic + Dearness Allowance) routed through the Employer, is deductible from taxable income u/s 80CCD (2)

  • Maximum limit of amount that can be claimed tax exempt is Rs. 7.5 lakh of employer contribution towards, NPS, PF and Superannuation all together. (Only available for Corporate NPS accounts).


Please Note 

  1. Tax deductions u/s 80CCD (1) and 80CCD (1B) shall be available only if the taxpayer opts for old tax regime. Please consult your CA to know more about this.

  2. Tax benefit under Section 80 CCD (2) can be availed in either of the tax regimes


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.