Voluntary Retirement Scheme

It is popularly known as VRS. 

Objective of employers:

1. To achieve optimum human resource utilization
2. Optimize ROI of the company
3. Due to joint ventures and collaborations
4. Due to takeover and merger, downsizing is required to avoid duplication of task

Eligibility for Employees:

1. Employees who have attained 40 years of age or completed 10 years of service are eligible for VRS
2. This scheme applies to all employees including workers and executives except the directors of the company
3. Employees employed on permanent basis provided they have completed minimum 5 years of service and have at least 5 years of service remaining before their superannuation

There can be any amount paid by the employer for VRS. For taxation purpose least of the following is exempt from tax

1. 3 months salary for each completed year of service
2. Salary at the time of retirement × balance months of service left before date of retirement
3. Rs. 5,00,000
4. Actual amount received

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