Quick Answer: What Is VRS Package?

What are the benefits of VRS?

The employee who opts for VRS is entitled to get: — Employee gets provident fund (PF) and gratuity dues.

— Compensation received at the time of VRS is tax-free up to the prescribed amount on fulfilling certain conditions.

— Companies also offer benefit packages to the employees who opt for VRS..

What is VRS compensation?

Compensation under VRS modelled on the Gujarat pattern will consist of salary of 35 days for every year of service completed and 25 days for every year of service left until superannuation. … 60 months salary as ex-gratia is permissible under VSS scheme of Department of Heavy Industry.

What is the rule for VRS?

Though the eligibility criteria for VRS varies from company to company, but usually, employees who have attained 40 years of age or completed 10 years of service are eligible for voluntary retirement. The scheme applies to all employees including workers and executives, except the directors of a company.

Is VRS amount taxable in India?

Under Section 10 (10C) of the Income-tax Act, 1961, compensation up to ₹5 lakh under VRS is exempt from tax. … If the scheme does not meet the conditions, then the entire amount is taxable in the hands of the employee under the head “income from salary”.

What do you mean by VRS?

Voluntary retirement schemeDefinition: Voluntary retirement scheme is a method used by companies to reduce surplus staff. This mode has come about in India as labour laws do not permit direct retrenchment of unionized employees. Description: VRS applies to an employee who has completed 10 years of service or is above 40 years of age. ?

How is VRS amount calculated?

The VRS amount is limited to an amount which is equal to three months’ salary of each completed years of service. Or in another way of calculation is salary at the time of retirement multiplied by the rest of the months of service before normal retirement. VRS amount up to Rs. 5 lakhs is exempted from tax.

What are the major objectives of VRS?

OBJECTIVE: (i) To achieve optimum human resource utilization. (ii) To optimize return on investment in PSU. (iii) In implementing the VRS scheme, managements shall ensure that it is extended primarily to such employees whose services can be dispensed with without detriment to the company.

How can I get VRS in central govt?

A Central Government employee could apply for voluntary retirement after completion of 30 years of service. He may be allowed to retire from his service under Rule No. 48 of CCS (Pension) Rules 1972. A Central Government employee could apply for Voluntary retirement after completion of 20 years of service.

What is difference between resignation and voluntary retirement?

“One of the basic distinctions is that in case of resignation it can be tendered at any time, but in the case of voluntary retirement, it can only be sought for after rendering the prescribed period of qualifying service.

What is the procedure for voluntary retirement?

Voluntary retirement-(a) A Government Servant who has attained the age of fifty years or who has completed twenty years of qualifying service may retire from service by giving notice of not less than three months in writing direct to the appointing authority with a copy marked to his immediate superior officer for …

How do I calculate my voluntary retirement pension?

50% of average emoluments or Last Pay drawn whichever is beneficial. Retiring Pension @ Rs. 20255/- per month w.e.f. 01.02….Model calculation: Voluntary Retirement (20 Years Service Based):PostClass-IDate of Appointment31.12.1987Date of Retirement01.02.2011(FN)2 more rows

How VRS is calculated Quora?

The employee who selects voluntary retirement is qualified for get forty five days payments for each finished year of service or month to month remittances at the time of retirement multiplied by the remaining months of service before the typical date of service, whichever is less.