Can VRS be extended only by loss-making companies?

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• Has the exemption of amount received under VRS been extended to central and state government employees?

  Yes. The exemption of amount received under VRS is extended to all employees of the Central Government w.e.f. Assessment Year 2002-2003 and for all State Government employees w.e.f. Assessment Year 2001-2002.

• Will the VRS be tax exempt if it is given in addition to normal retirement benefits like PF, gratuity, pension etc. under employment terms?

  Yes. The provisions of VRS exemption are separate from the provisions which govern the taxation of other retirement benefits like Provident Fund, Gratuity, Pension, etc. Hence, VRS amount will be tax exempt even if other retirement benefits are ...

• Can there be a loss under the head 'Salaries'?

  No. There cannot be a loss under the head of salaries.

• Does the employer have to deduct TDS from VRS amount?

  No. There is no TDS on VRS amount if it is within the specified limits.

• How is the VRS compensation computed?

  The compensation of VRS is computed by the authority as per the scheme framed by them. The amount receivable by the employee on account of voluntary retirement should not exceed: i) the amount equivalent to 'three months’ salary for each completed ...