A N Shanbhag explains various issues related to the Voluntary Retirement Scheme
The Voluntary Retirement Scheme with its associated exemptions was inserted in the Income Tax Act way back in 1987. Ever since, there has been a misconception that the entire compensation has to be paid in a lump sum.
This payment at one go put a lot of financial pressure on the employers but they managed somehow. It was only when some public sector units, particularly the banks, offered their voluntary separation schemes, that things changed. However, this raked up several important issues.
The following is an interesting summary of an important case on the subject
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