VS-2010-This setup requires the .net framework version 4.0 for setup projects

In order to avoid this error please make sure below things:

Target Framework of your application should be less than Framework 4.0 if you do not want it dependent on .net framework 4.0.
In the setup project, double click on Microsoft Net Framework under Detected Dependencies. Now open the properties of Net Framework, and select any framework less than 4.0.

Happy Coding.
Hope it helps.