What is City Compensatory Allowance (CCA)?
City Compensatory Allowance (CCA) is a type of allowance offered by companies to their employees to compensate for the high cost of living in metropolises and large cities. This is typically offered to employees staying in Tier 1 cities and in some cases Tier 2 cities at the discretion of the employer. CCA is fully taxable under Indian income tax laws.
Get more on Income Tax Slabs, e-Filing Income Tax, Income Tax Refund, How to file ITR and Income Tax Return in our artilces
CCA Component in Salary:
The CCA component in salary is left to the discretion of the company who’s paying the salary. The component of CCA in the overall salary can be seen in the salary slip issued to employees. CCA is given irrespective of basic salary component.
City Compensatory Allowance Exemption Limit:
There is no exemption for CCA in calculation of income tax. The CCA will be added to the normal income of a person and tax calculated as per his/her respective tax bracket.
City Compensatory Allowance Rates:
There are no fixed rates on CCA. Once again, the rates are decided on the discretion of the employer.
City Compensatory Allowance Calculation:
City Compensatory Allowance calculations is done by the employer on their discretion. However, the CCA for the employees of a company in the same city tend to be same for everyone irrespective of their job title or position in the company. An entry-level employee may receive the same CCA compensation as the general manager of the same company in the same city.
Difference between City Compensatory Allowance, Dearness Allowance and House Rent Allowance (CCA, DA and HRA)
The CCA does not come under governing rules and regulations except for the fact that income tax are applicable on them. However HRA and DA have to be calculated as a fixed percentage of salary of an employee.
HRA:
Given to employees as a fixed percentage of their basic salaries. It is non-taxable up to Rs.1 lakh if rent is being paid by the employee and rent receipts are duly submitted to the employer for filing tax returns.
DA:
Again calculated as a fixed percentage of basic salary. This is given to shield employees against inflationary pressures.
CCA:
Fully taxable component of salary generally given to employees working in big cities to compensate for the higher standard of living. This is a fixed amount instead of a fixed percentage of basic salary.
Income Tax Other Pages
- Composite Income Tax Features
- Conveyance Allowance
- Dearness Allowance
- Efiling
- Impact Of New Income Tax Slab
- Income Declaration Scheme
- Income Tax Deductions
- Income Tax Exemption Guide
- Income Tax Exemption Rules
- Income Tax For Pensioners
- Income Tax For Senior Citizens
- Income Tax Medical Bills Exemption
- Income Tax Scrutiny
- Income Tax Slabs And Rates For Assessment Year 2016 17
- Is Stipend Taxable
- Medical Allowance
- Nri Taxation
- Nri Tax Return
- Special Allowance
- Surcharge On Income Tax
Tax Top Pages
- Tax Credit
- Stamp Duty
- Withholding Tax
- Cancelled Cheque
- Income Tax Act
- Tax Evasion
- Tax Rebate
- Gross Salary
- Professional Tax
- Trademark Registration
- Corporate Tax
- Net Salary
- Tax Exemption
- Advance Tax Payment
- Gst News
- Ghmc Property Tax
- Form 15G
- Deferred Tax
- Marginal Tax Rate
- Csd Price List For Cars Bikes
Tax Trending Pages
- All About Epf
- Form 10C
- Guide To Form 16 And 16A
- Gst Benefits
- Gst Bill
- Gst Compensation To States
- History Of Gst
- Gst Limits
- Accounting Of Interest Tax Under Gst
- Hindu Undivided Family Tax Planning
- Guide To Income Tax Notice Scrutiny Cases
- Andhra Pradesh Professional Tax Slab Rate
- Gujarat Professional Tax Slab Rate
- A Khata Property Tax
- Ahmedabad Muncipal Corporation Property Tax
- Coimbatore Property Tax
- Ghaziabad House Property Tax
- Indore Property Tax
- Kanpur Nagar Nigam Property Tax
- Kolkata Muncipal Corporation Property Tax
