Sometimes employers declare V.R.S for the employees as per the scheme, The employers pay a good sum of money in lump some or in parts and the employees retire voluntarily
Deduction allowed under this section for such amount paid as VRS
Deduction Amount
- This Deduction is allowed in 5 year starting with the year when amount is paid (1/5 every year)
- No Deduction of VRS Expenses under any other Section
- In case amount paid in instalments , deduction allowed for each instalment separately in 5 years
QUESTIONS
Q1
| Proft and Loss of A Ltd | |
| SALES | 1000000 |
| Less | |
| EXPENSES | 400000 |
| PROFIT | 600000 |
Suppose expenses include VRS expenses of 100000
View answer
| Computation of PGBP Income | |
| Profit as per P& L A/c | 600000 |
| Add | |
| Expense Disallowed | |
| VRS Expenses | 100000 |
| Less | |
| Expense Allowed | |
| 1/5 of VRS Expenses | 20000 |
| PGBP INCOME | 680000 |