Voluntary retirement

 Voluntary retirement [Sec. 10(10C)]

Meaning–Voluntary retirement is used as a way to reduce the total workforce of a company. Therefore, the company cannot hire new people in the place of the old employees who retire. The employees who opt for voluntary retirement cannot take up a job with the same company, its management, or a sister concern.

1. Any payment received or receivable by an employee of

1. A Public sector company,

2. Any other company,

3. A statutory authority,

4. A  local authority,

5. A  co-operative society,

6. A University,

Aur voluntary retirement all termination of service and recording with the scheme of Voluntary retirement

2. In case of public sector company, a scheme of voluntary separation, Shall be exempt up to specified limit.

Amount received on voluntary retirement or voluntary separation

  least of the following is exempt from tax.

1) actual amount received as per the guideline either least of the following.

1. 3 months average salary × completed year of service.

2. Salary at the time of retirement × No. Of months of service left for retirement; or

3. ₹ 50,00,000.

Meaning of salary

• Basic Salary

• Dearness Allowance

• Commission