VRS scheme

Who can claim (sub-rule 1). An employee of a public sector company; any other company; an authority established under a Central, State or Provincial Act; a local authority; a co-operative society; a University established under such an Act or an institution declared a University under section 3 of the University Grants Commission Act, 1956; an Indian Institute of Technology; an institution of importance throughout India or in a State or States specified by the Central Government by notification; or another institute of management specified by notification.

Conditions on the scheme (sub-rule 2). The deduction is allowed only if the scheme (voluntary retirement, or voluntary separation framed by a public sector company):

1. applies to an employee who has completed ten years of service or forty years of age;
2. applies to all employees, including workers and executives, except directors of a company or co-operative society;
3. is drawn to result in an overall reduction in the existing strength of employees;
4. does not allow the vacancy to be filled;
5. does not permit the retiring employee of a company to be employed in another company or concern of the same management; and
6. caps the amount receivable at the lower of A or B, where A = 3 × N × S and B = M × S — N is completed years of service, M is balance months of service left before superannuation, and S is salary at retirement.

Public sector voluntary separation (sub-rule 3). For an employee of a public sector company under that company's voluntary separation scheme, the age-or-service condition in sub-rule (2)(i) does not apply.

Salary for this rule (sub-rule 4). Includes dearness allowance if the terms of employment so provide, and excludes all other allowances and perquisites.