Hi ,
I have a few questions regarding the city compensatory allowance.
1.Is there a limit or a percentage for the CCA in metros and other cities?
2.If there is no limits what should be the way to calculate the CCA?
3.If dearness allowance is bieng paid then should the CCA be paid or only one of them is sufficient.
Hoping for prompt replies.
Thanking you
Jaiwardhan Singh
17th June 2008 From India, New Delhi

India, Kannur
Industrial Relations And Labour Laws
India, Mumbai
Manager - Human Resource
India, Delhi
Hr In A Reputed Automobile Company
India, Bangalore
Hr Officer
India, New Delhi
+1 Other

City Compensatory Allowance is paid to compensate cost of living in the city. Dearness Allowance is also a kind of compensation but it takes in to account the general cost of living, defenitely variable according to grades of city. Normally, CCA will be equal to all employees right from the Manager to Sweeper barring some exceptions where comapnies may have different CCAs to different categories of employees. That is why CCA is not calculated as percentage of Basic but paid as a fixed amount whereas DA (except Industrial Variable DA) is paid as percentage of Basic Salary.
The amount of CCA to be paid depends on company's policy and there is no legislative ruling in this regard except the taxability.
20th June 2008 From India, Kannur
Hi Madhu,
Thanks for this information. I want to know whether this allowance is taxable or not. If not what is the maximum limit.
I have read many of your postings. Its always very organized & informative.
25th February 2009 From India, Bangalore
I regret to say that I do not have any ready made information about the amount of CCA throughout India. It is purely a matter depended on the company's policy about categorisation of city by the company. Therefore, two different companies may have two different CCA to the employees posted in the same city.
27th February 2009 From India, Kannur
Hi Mr. Madhu, I want to know is that, If the CCA is equal to DA, So, PF is applicable on that, & what is the maximum limit of the same. Regards,
27th February 2009 From India, Mumbai
CCA is DA. Both are different items. When DA reflects the actual cost of living index, the CCA need not necessarily change according to CPI. Normally, it will be fixed and it is given to 'compensate' additional expenses (only to an extent) involved in the city life. Therefore, it will not attract PF.
28th February 2009 From India, Kannur
hi madhu can u plz provide formula for calculation of Dearness Allowance (including cpi calculation).
1st March 2013 From India, Hyderabad
Mr. Bharat,
I am unable to find the relevant link concerning your query. Would like to tell you that you can access the required information if you check all the post of Madhu T K Sir. Once I came across that in his posts.
1st March 2013 From India, Delhi
No, but i would like to know how we calculate dearness allowance.. i was not check madhu sir posts.
1st March 2013 From India, Hyderabad

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