Can someone share appropriate tags and methods to perform virtual crystal approximation calculations in VASP?
In general the best resource for details about VASP tags and their use is the VASP wiki page. For the virtual crystal approximation the relevant tag appears to be "VCA" and the corresponding wiki page is here.
I have never used the virtual crystal approximation, so cannot speak about its merits. However, I would highlight the text at the bottom of the VASP wiki page, which suggests that calculations may not be very reliable:
Caveats: Unfortunately results of this kind of VCA calculations are often not very reliable. The problems are even apparent in the original publications by . The key point is that the used PAW potentials need to be constructed in such a way that the pseudo atomic waves are very similar for the potentials that are "mixed" (in the example above this would be the Ge and Sn potentials). This can be achieved by carefully optimizing the radial cutoffs. Furthermore, the local potentials of the two POTCAR files need to be very similar. This means that results for many standard potentials are not accurate. For instance, Vegard's law is often not even approximately observed (instead the volume is way too large at 50 % mixing). The problem is particularly severe, if semi-core states are treated as valence states. For instance, for the Ge and Sn alloy the d electrons had to be treated as core electrons to obtain reasonable results. Any attempts to tread the d electrons as valence states lead to crossly incorrect results.
 L. Bellaiche and D. Vanderbilt, Phys. Rev. B 61, 7877 (2000).