Tax exemption on VRS, Ex-Gratia

1.For Voluntary Retirement what is the maximum tax exemption under 10(C) or 2BA? For example if I got 16 lakh as VRS payment, how much exemption I can expect?
2. Also please let me know if Ex-Gratia and VRS are same?

Hi @Anirban ,

  1. The amount of exemption in relation to VRS u/s 10(10C) is lower of the following:
  • Three months salary for each completed year of service

  • Salary at the time of retirement multiplied by the balance months of service left before the date of retirement

  • INR 5,00,000

  • Actual amount received

  1. Ex-Gratia is a wider term which covers any payment made to employee as a gift or favour, where as VRS is a payment made to employee under VRS Scheme formulated by the employer.

You can refer to the detailed guide on VRS Taxation in the below article:

Hope it helps!