Regular post-retirement income | Invest up to 10% of the salary (Basic Salary + DA) and avail tax benefit u/s 80CCD (1) Invest Now

Corporate NPS is an extension of the National Pension Scheme. As an initiative undertaken by the government, Corporate NPS aligns with wealth creation goals while offering tax-efficient retirement planning.


In this scheme, both employers and employees contribute to the latter’s NPS account, fostering disciplined savings for retirement. Employees enjoy tax benefits under Section 80CCD (2) of the Income Tax Act, 1961, for employer contributions. 


This portable pension system offers a range of investment options, empowering employees to tailor their portfolio. At retirement, a part of the corpus can be withdrawn as a lump sum, providing financial flexibility.

Features and Benefits of Corporate NPS

Tax-saving Investment

Under Section 80CCD (1), employer’s contribution towards NPS, up to 10% of salary (Basic salary + Dearness Allowance) is eligible for tax deduction.

Market-linked Returns

Allocate the corpus across equity, corporate debt, government securities, and alternative assets based on your preferred asset allocation percentages.


It is fully portable, ensuring continuity across job changes or relocations within India.

Low-cost Scheme

It has one of the lowest expense ratios, i.e. fund management fees, for a managed fund.

Employee Benefits

As an employee, you can maintain the same Corporate NPS account until you attain 60 years of age.

Active and Auto Investment Facility

The active option allows personal management, while the auto option follows a predefined allocation by NPS.

ITR File Kiya Kya?

File online, track refund updates, calculate deductions, and more.
Tax image

Eligibility Criteria for Corporate NPS

The following eligibility criteria must be adhered to for an individual or entity to subscribe to the Corporate NPS scheme: 

  • You must be an Indian citizen

  • You should be between 18 and 60 years of age

  • You should be an employee of an entity registered under the NPS Corporate Model

The type of entities that can register under or join the NPS Corporate Model for the benefit of their employees are mentioned below.

  • Entities registered under different Co-operative Acts

  • Entities registered under the Companies Act, 2013 

  • State Public Sector Enterprises

  • Central Public Sector Enterprises

  • Registered Limited Liability Partnerships

  • Entities incorporated under state or Parliament Legislature

  • Entities incorporated by order of the state or Central Government

  • Societies

  • Trusts

  • Proprietorship Concerns

Read More

Tax Benefits Under Corporate NPS

Under sections 80C and 80CCD, you are entitled to tax benefits and exemptions should you invest in corporate NPS. Below is a breakdown of the tax benefits employees are eligible for.

1. Tax Benefits for Employees

Contributions made by the employer on behalf of the NPS subscriber is tax deductible subject to the following:

  • Up to 10% of the salary (Basic Salary + Dearness Allowance)

  • Total deductions for retiral contributions is limited to ₹7.50 Lakhs p.a.

The employee can also claim a tax deduction on an additional self-contribution of up to ₹50,000 under Section 80CCD (1B).

2. Taxability on returns from NPS

The returns earned on NPS and the lump sum withdrawal at the age of 60 years are tax-free. On withdrawing 60% of the corpus at 60 years, you must utilise the remaining 40% to purchase annuity plans. 


However, the monthly payout that is received in the form of an annuity is taxable since this is treated as income in the year of receipt.

Investment Options Under Corporate NPS

The investment options under Corporate NPS are essentially the fund allocation patterns of this investment scheme, as explained below: 

1. Active Choice

Active choice allows you to distribute your funds into the four investment streams of Corporate NPS. Here, you can choose the percentage of your total funds that will be invested across the four types of investment options: 

Asset Class

Allocation Limit 


Corporate Bonds


Invested in fixed-income debt securities



Invested in equities since they’re high-risk investments

Alternate Assets


Allocated to infrastructure or real estate funds 

Government Securities 


Invested in debt instruments of the government

2. Auto Choice

Those who don’t hold much experience in investing can opt for the auto choice. Here, your funds will be invested in a predetermined asset class allocation pattern depending on your age. 

The following risk-appetite parameters determine the allocation patterns:

Life Cycle Fund

Equity Exposure 

Reduction Age

Aggressive Life Cycle Fund (LC 75)


Until 35 years, then gradually decreases

Moderate Life Cycle Fund (LC 50)


Until 35 years, then gradually decreases

Conservative Life Cycle Fund (LC 25)


Until 35 years, then gradually decreases

Difference Between NPS and Corporate NPS

Understanding the difference between NPS and Corporate NPS ensures clarity when considering pension schemes based on individual or corporate preferences. Here’s a table outlining the distinctions between the two:   

Basis of Comparison


Corporate NPS 


Indian citizens, including employees from public, private, and unorganised sectors

Employees of corporations that have opted for Corporate NPS 


Government of India

Organisation offering Corporate NPS 


Pension Fund Regulatory and Development Authority (PFRDA)

Trustee appointed by the sponsoring organisation


Employee and employer contributions are mandatory and set by subscriber

Sponsoring corporations determine and make contributions

Investment Choice

Choose the preferred fund managers and different asset classes

Sponsoring organisations predetermine the investment options  

Tax Benefits

Deductions available under Section 80C 

Deductions available under Section 80CCD(2)


Partial withdrawals allowed after 3 years 

Withdrawals depend on the terms and conditions set by the Corporate NPS trust deed 


Invest a minimum of 40% of the corpus in an annuity from a PFRDA-approved insurer

Annuity plan purchases are subject to any terms and conditions set by the Corporate NPS trust deed 

FAQs on Corporate NPS

Can Corporate NPS be withdrawn anytime?

Partial withdrawal is allowed after 3 years, permitting subscribers to withdraw 25% for reasons like illness, disability, education, marriage, property purchase, or starting a new venture.

What is the minimum investment in corporate NPS?

The minimum initial contribution at the time of registration for NPS Tier I accounts is ₹500 and ₹1,000 for Tier II accounts. After that, the annual minimum contribution is ₹1,000 for Tier I accounts and zero for Tier II accounts.

What happens to Corporate NPS if I resign?

If the corpus when initiating a premature exit request is ₹2.50 Lakhs or less, the entire amount can be withdrawn as a lump sum.

How much Corporate NPS is tax free?

At retirement, tax exemption applies to 60% of the withdrawn corpus as a lump sum. The remaining amount, when invested in an annuity, is also tax exempt.

Loan Offer
Download App