Section 10(10C) → Section 12
Exemption of amount received on Voluntary Retirement (VRS)
Quick Answer
Section 10(10C) of the Income Tax Act, 1961 (Exemption of amount received on Voluntary Retirement (VRS)) corresponds to Section 12 of the Income-tax Act, 2025, effective 1st April 2026. Status: Retained.
What changed for Section 10(10C)
In the 1961 statute, Section 10(10C) deals with exemption of amount received on voluntary retirement (VRS). Exempts up to Rs. 5 Lakhs received by an employee at the time of voluntary retirement or termination of service.
From 1st April 2026, the same subject sits at Section 12 of the Income-tax Act, 2025 — retained and renumbered as Section 12 of the Income-tax Act, 2025. Retained. Applies to PSU, government, and private sector employees fulfilling specific criteria.
For Section 10(10C), the practical impact is rated High. Standard tax planning tool during corporate layoffs.
Sec 10(10C)
Provision Summary
Exempts up to Rs. 5 Lakhs received by an employee at the time of voluntary retirement or termination of service.
Sec 12
Provision Summary
Retained. Applies to PSU, government, and private sector employees fulfilling specific criteria.
Key Changes & Highlights
- Cannot be claimed if relief under Section 89 has been taken for the same amount.
Related Sections
Frequently Asked Questions
What is Section 10(10C) of the Income Tax Act, 1961 about?
Section 10(10C) of the Income Tax Act, 1961 covers exemption of amount received on voluntary retirement (VRS). Exempts up to Rs. 5 Lakhs received by an employee at the time of voluntary retirement or termination of service.
Which section replaces Section 10(10C) in the Income-tax Act, 2025?
Section 10(10C) of the Income Tax Act, 1961 maps to Section 12 of the Income-tax Act, 2025, effective 1st April 2026 (status: Retained). Retained. Applies to PSU, government, and private sector employees fulfilling specific criteria.
What is the impact of the change to Section 10(10C) under the new tax code?
The transition impact for Section 10(10C) is rated High. Standard tax planning tool during corporate layoffs.
What should I watch out for when Section 10(10C) moves to the 2025 code?
Cannot be claimed if relief under Section 89 has been taken for the same amount. These points are specific to Section 10(10C) (Exemption of amount received on Voluntary Retirement (VRS)).
Disclaimer: This mapping of Section 10(10C) (Exemption of amount received on Voluntary Retirement (VRS)) to Section 12 of the Income-tax Act, 2025 is for educational and reference purposes only, based on publicly available drafts and circulars. As Section 10(10C) is currently marked Retained, always confirm its treatment with a qualified Chartered Accountant before filing or making compliance decisions.
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