So here is the solution. Just in case someone is stuck in the same scenario. You don't have to assign VLAN on the phone and just out of the box IP Phone works.
[lldp-config]
<lldp-config>
lldp enable
lldp enable port 0/1/3
lldp tlv-enable dot3-tlv mac-physic port 0/1/3
lldp tlv-enable med-tlv capability port 0/1/3
lldp tlv-enable med-tlv inventory port 0/1/3
lldp tlv-enable med-tlv network-policy media untagged port 0/1/3
lldp tlv-enable med-tlv network-policy signaling 21 port 0/1/3
=======
#display lldp neighbor port 0/1/3
Port 0 /1 /3 has 1 neighbor(s)
ChassisId subtype : networkAddress
ChassisId : xxxxxxxxx
PortId subtype : macAddress
PortId : 6416-7f9d-xxxx
Port description : 1
System name : Polycom VVX 501
System description : Polycom;VVX-VVX_501;3111-48500-001,1;SIP/6.1.
1.2670/23-Nov-19 02:53;UP/6.1.1.2644/23-Nov-1
9 03:18;
System capabilities supported : bridge, telephone
System capabilities enabled : telephone
Management address : ipV4: xxxxxxxxxx
Expired time : 120s
MED system information
Device class : Endpoint Class III
Hardware revision : 3111-48500-001,1
Firmware revision : UP/6.1.1.2644/23-Nov-19 03:18
Software revision : SIP/6.1.1.2670/23-Nov-19 02:53
Serial number : 000000000
Manufacturer name : Polycom
Model name : VVX-VVX_501
Asset ID : -
Auto-negotiation supported : Supported
Auto-negotiation enabled : Enabled
Operational MAU type : 1000BASE-T full duplex mode
Application type : Voice
Unknown policy : Defined
VLAN tagged : Tagged
VLAN ID : 21
802.1p priority : 5
Dscp : 46
Application type : Voice Signaling
Unknown policy : Defined
VLAN tagged : Tagged
VLAN ID : 21
802.1p priority : 5
Dscp : 26