The company may frame different VRS schemes for different grade of employees.
For income tax exemption under this act there are certain guidelines and rules.
- VRS applies to an employee of the company who has completed 10 years of service or 40 years age
- It applies to all employees and executives (excluding directors).
- It has been drawn to result in overall reduction in the existing strength of the employees of the company.
- Vacancy caused by the VRS is not to be filled up.
- The retiring employee is not to be employed in other business belonging to the same management.
- The employee has not Availed in the past the benefit of any other voluntary scheme.
Below is the tax treatment for VRS.