The features applicable under All Citizens of India are available under corporate sector. In addition to these features, a corporate / subscribers under corporate sector can opt for the following:
Co-contribution
NPS provides platform for corporate to co-contribute for its subscribers or facilitate them to contribute for their pension. There are three variations of contributions from employer and employee:
- Equal contributions by employer and employee
- Unequal contribution by the employer and the employee
- Contribution from either the employer or the employee
A Corporate subscriber can also voluntarily contribute in their Tier I through their associated POP. However, contribution in Tier II account can be done through any POP.
Scheme setup option
In NPS, a Corporate would have flexibility to decide investment choice either at subscriber level or at the corporate level centrally for all its underlying subscribers. A corporate can also select a PFM at a corporate level and allow the underlying subscriber to decide the allocation of funds among the three asset classes viz: Equity, Corporate Debt and Government Security.
Tier II
A corporate subscriber can open both Tier I and Tier II account simultaneously at the time of initial registration or can activate Tier II account subsequently through the associated POP. The investment option for the Tier-II account needs to be exercised by the subscriber, which can be different from Tier-I account.
TAX Benefits
Tax Benefit to Corporate
10% of the salary (basic and dearness allowance) of employers Contribution can be deducted as “Business Expense” from their Profit & Loss Account.
Tax benefit to Subscriber
The employer’s Contribution to NPS upto 10% of basic plus DA is allowed deduction under section 80CCD(2) and excluded from the limit of Rs.1.5 lakh.(http://indiabudget.nic.in).
