Income Tax 13 October 2026
VRS Offer? Know Tax Rules Before You Agree
A voluntary retirement scheme (VRS) payout of Rs 7 lakh is treated as regular salary income and taxed according to the employee’s applicable slab and chosen tax regime, whether old or new. Understanding this rule helps avoid unexpected tax bills when accepting a VRS offer.
Taxable amount: The Rs 7 lakh VRS payment is added to your salary and taxed according to your chosen tax regime and slab.
- If you’re under the old regime, it follows the existing slab rates.
- Under the new regime, it is taxed as per the lower rates applicable.
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