Take This Quiz & Predict Your Score in the coming CA CS or CMA Exam!
  • How important it is for you to pass the exam in this attempt?
  • What percentage of course you have finished well so far roughly?
  • How many hours you study in a day?
  • How many times you have revised the topics you have finished
  • Have you taken online or pen drive or live class from a renowned faculty?
  • What percentage of the classes you have watched?
  • Have you attempted mock tests or practice tests yet?
  • Are you planning to attempt mock tests conducted by external bodies- ICAI, ICSI, ICMAI or other institute?
  • How many tests you have taken?
  • Did you manage to finish the test papers on time?
  • Are you strictly following study material provided by the exam conducting authority such as ICAI/ICSI/ICMAI/Other Body?
  • How is your health in general?
  • How is your food habit?
  • Any interest in yoga or exercise or play sports regularly?
  • Planning to sleep well nights before the exams?
  • Planning to have light food and water before exams?

Tax on Compensation on Voluntary Retirement or Separation

Tax on Compensation on Voluntary Retirement or Separation

As per Section 10(10C) any compensation received upon voluntary retirement or separation is exempt from tax when the following conditions are fulfilled

  • Compensation received is towards voluntary retirement or separation
  • Maximum compensation received is Rs 5,00,000.
  • Exemption when allowed for a assessment year, will not be allowed for any other assessment year.
  • The recipient is an employee of an authority established under the central or state act, local authority, university, IIT, state government or central government, notified institute of management, or a notified institute with importance throughout India or any state, PSU, company or cooperative society.
  • The receipts are in compliance with Rule 2BA
  • Where relief under section 89 has been taken by an employee for compensation for voluntary retirement or separation or termination of services – no exemption shall be available under this section for the same assessment year or any other assessment year.

Rule 2BA – the scheme of voluntary retirement must fulfill these conditions-

  • The recipient must have completed 10 years of service or 40 years of age (not applicable to employees of a PSU) – therefore a less than 40 years old employee of a company which is less than 10 years old will not able to satisfy this condition and therefore no exemption will be available to such an employee.
  • The scheme is applied to all employees, including workers & executives of a concern excluding directors of a company or a co-operative society.
  • The scheme shall result in overall reduction of the existing strength of the employees of the company.
  • The vacancy caused by voluntary retirement or separation is not filled up, and the retiring employee must not be employed in another company or concern belonging to the same management.
  • The amount receivable does not exceed 3 month’s salary for each completed year of service OR monthly emoluments at the time of retirement multiplied by balance months of service left before the date of his retirement.

Tax on Compensation on Voluntary Retirement or Separation



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