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.

1. VRS applies to an employee of the company who has completed 10 years of service or 40 years age
2. It applies to all employees and executives (excluding directors).
3. It has been drawn to result in overall reduction in the existing strength of the employees of the company.
4. Vacancy caused by the VRS is not to be filled up.
5. The retiring employee is not to be employed in other business belonging to the same management.
6. The employee has not Availed in the past the benefit of any other voluntary scheme.

Below is the tax treatment for VRS.