Understanding CCA vs. City Allowance: How Do They Affect Your Salary and Taxes?

Hello seniors, I would like to know what the difference is between CCA and City Allowance. What is the limit for both in the salary structure? Is it exempted in TDS? If yes, then what is the percentage? I need your urgent help.

Regards, Swati.

In my view, there is no difference between these two terms, and there is no fixed limit in the private sector under this heading. It is not exempt from income tax deductions.

Understanding CCA and City Compensatory Allowance

CCA and city compensatory allowance are the same, and it is normally paid during employee transfer or relocation. It is fully taxed. Basically, it is fixed as per the employee's designation and expenses in the transferred city.

Regards

Regarding the City allowance, my friend has worked in one of the companies in Bangalore for 1 year. After leaving this company, the company informed him that in the final settlement, they had given him a city allowance, and he should have worked for at least 2 years to be eligible for it. However, in the final settlement, they are deducting the allowance given to him during that period.

Do you have rules for deducting the city allowance?