Deduction to an employer in respect of Voluntary Retirement Scheme payment to his employee.
Some more provisions of this section are-
- Employer may claim deduction even its VSS/VRS scheme is not in accordance with Rule 2BA.
(However under salary head employee can claim exemption of Rs. 500000 only when employer’s scheme is as per Rule 2BA.)
- Deduction is available only when VRS amt is actually paid i.e. not on accrual basis.
- Actual paid amount is deductible in five equal annual installments- i.e. one fifth of the amount so paid shall be deducted in computing the profits and gains of business for that previous year in which payment is made, and balance shall be deductible in equal installments for each of the four immediately succeeding previous year.