A New Smarter Way From MNCs To Make Staff Rich
Those employees who join NPS on their own are free from tax exemption on contributions to the scheme for up to 10% of their salary, with an upper limit of 
1 lakh per year. In this case, the exemption is counted as the widely used 80C ceiling under which 1 lakh is reduced from income for calculating tax. There is additionally another provision that allows tax saving for employers contributing 10% of their basic salary to NPS.
As per the terms of NPS, an employee with a basic salary of 10 lakh can deduct a lakh or more from his salary, over and above the 80C deduction; for the purpose of calculating tax, reducing tax burden by an additional 30,000. It is crucial that a corporate has to be a part of NPS for its employees to benefit. The extra tax benefits are not available on pension products; for instance, sold by insurance companies.
More or less, 340 corporates have joined NPS, worth over 1 lakh subscribers. Certain companies have offered NPS as an extra social security cover over and above EPFO. In December 2012, the total assets under management (AUM) of NPS stood at 24, 687 crore out of which, the share of corporate is around to 805 crore or 3% of the total AUM.
"The numbers will go up dramatically if there is greater awareness at the senior management level. After all, it is for the company or institution to take a call on giving employees the choice to opt for NPS, given that it is a sound vehicle to accumulate a retirement corpus, offering superior returns than the EPFO," says Gautam Bharadwaj, director, Invest India Economic Foundation.
