What exactly is the exit criteria for testing or when should one actually stop testing.

This is an extremely subjective topic and can vary from project to project
however, still there are few verticals based on which we can take a call to exit
the testing. These are as below:  

a) If the QA is sure that the developed software captures all the requirements

b) If the defined pass percentage is achieved

c) Bug rate is low with no high or medium severity bug in the system.

d) Testing cost cannot justify continuation of testing