Taxability of VRS compensation

Taxability of VRS compensation
Terminal benefits cannot be brought within the scope of “amount received” under Section 10(10C), which was introduced to make voluntary retirement attractive.
T. C. A. Ramanujam
Section 10(10C) of the Income-Tax Act, 1961 exempts payments received by a salaried employee from the employer under a Voluntary Retirement Scheme up to Rs 5 lakh. The law requires that the scheme should be framed in accordance with the guidelines prescribed in Rule 2 BA of the I-T Act. No relief is available if the scheme is not approved prior to the date of voluntary retirement. Subsequent approval will not entitle a retired employee to claim exemption. TO READ MORE CLICK ...BUSINESS LINE