VRS Calculator India — Voluntary Retirement Benefits 2026

Last updated: 29 April 2026 Reviewed by Deepa Krishnan, CFP

**Voluntary Retirement Scheme (VRS)** benefits typically include: ex-gratia payment (salary × months × service years), gratuity (up to ₹20L tax-free), leave encashment (up to 30 days per year tax-free), and EPF/NPS corpus. Government employees under VRS Rule 25 or 39 receive different formulas. This calculator covers the key components of VRS compensation.

Monthly Basic + DA (₹)

Years of Service Completed

Years Remaining to Retirement

Accumulated Earned Leaves

VRS Ex-Gratia Compensation —

Gratuity Amount —

Leave Encashment —

Total VRS Package —

Tax-Free Amount (Section 10(10C)) —

View Year-by-Year Breakdown

Real-World Examples — 2026

₹80,000 basic, 20 years service, 10 years remaining

VRS Formula A: 3 × 80,000 × 20 = ₹48 lakh. Formula B: 80,000 × 120 months remaining = ₹96 lakh. Ex-gratia = ₹48 lakh (lower). Plus gratuity ₹9.23 lakh + leave encashment ₹3.69 lakh. Total VRS package ≈ ₹60.9 lakh.

Tax on VRS package

₹48 lakh ex-gratia has ₹5 lakh exemption under 10(10C). Taxable VRS = ₹43 lakh. At 30% bracket: tax = ₹13.32 lakh. Careful planning — taking VRS in a year with no other income minimises tax. Some spread VRS across financial years.

Frequently Asked Questions

What is VRS ex-gratia and how is it calculated?

VRS ex-gratia = lower of: (a) 3 months' salary for each completed year of service, or (b) salary × remaining months of service. Formula A for 20 years: 3 × monthly salary × 20 = 60 months' salary. Formula B: salary × months remaining to 60. The lower of the two is the VRS payment.

Is VRS compensation taxable?

VRS compensation is exempt from tax under Section 10(10C) up to ₹5 lakh (public sector) or as per Central Government scheme for other employees. The ₹5 lakh VRS exemption is combined for all years — you can claim it only once in a lifetime.

Who is eligible for VRS in India?

VRS is available to employees of central/state governments, PSUs, and companies with 50+ employees. Eligibility: completed 10 years of service OR attained 40 years of age (either criterion). The employee must apply voluntarily — compulsory separation is different from VRS.

Is the VRS Calculator free?

Yes, completely free on CalcPhi with no registration.

Are my inputs stored?

No. All calculations run in your browser. Your data is never stored.

Is it mobile-friendly?

Yes. Works on all modern smartphones and tablets.