dear

CCA means city compensatory allowance.there is no fixed percentage of basic for this.
basically this is given in government organizations and generally private sector does not
bifurcate in CCA.
tks

C.C.A means Compensatory City Allowance admissible to the Central govt employee as
compensation of the higher cost city livelihood. Amt. of this allowance vary according to the
category of cities.

City Compensatory Allowance as Part of the Salary Component

What is CCA?
CCA or city compensatory allowance is now an integral component of a CTC structure (both for
companies and business establishments in the public and private sectors). CCA is payable to all
employees and workers who work and reside in certain urban zones where the cost of living is
higher than the national average. Since the cost of livelihood differs from city to city or from one
urban or rural region to another, the CCA that youd be actually eligible for will also vary
correspondingly. The CCA component of a salary structure is generally worked out on the basis
of the grade or scale of pay and not on the basis of basic salary.

CCA or city compensatory allowance is now an integral component of a CTC structure (both for
companies and business establishments in the public and private sectors).

My query is
About the allowance and their calculation including FBT benefits given
to employee as part of their CTC.
Can anyone explain me the salary break up of 50000
Basic
HRa 50%

Conv 800
PF employee 780
PF employer 780
What would be
Helper Allowance
Uniform Allowance
LTA
Medical
Special Allowance
Education Allowance
Basic(@ 40% of CTC)= 20000
HRA(@50% of Basic)=10000
Conv. Allow=800(tax exempt upto 9600pa)
Medical Allow=1250(IT Exempt upto 15000 pa)
Special Allow=5000
Children Education Allow=200(Maxim 2400pa (2 children); tax exempt subjected to
School/colledge going children)
PF=780+780=1560.
Helper Allow=2000
uniform allow= 3000
LTA=6190(tax exempt twice in a block of 4 yrs )
Hope this will help you out.

City Compensatory Allowance

CCA allowance is paid to employees who are posted in big cities. The purpose is to
compensate the high cost of living in cities like Delhi, Mumbai etc. However, it is fully taxable.

Allowance: means Fixed amount of money or other substance given monthly

in addition to salary to meet the particular type of expenditure.

Income Tax 2013-14 Assessment Year 2014-15

Complete Guide to determine Income Tax for Salaried
Class Employees
Income Tax 2013-14 : Click here to go to GConnect Income Tax Calculator to
calculate Income Tax 2013-14 Assessment Year 2014-15 with save option
we have provided here a detailed guide for Income Tax 2013-14
Assessment Year 2014-15 applicable to Salaried Class Employees.
Government has brought three important changes this year which are relevant
to Salaried Class Employees in the finance bill 2013-14. Those are
1. Income Tax Rebate of Rs.2000 for individuals having total income up to Rs.
5 lakhs (click here for detailed discussion on Total Income)
2. Deduction of interest on housing loan up to Rs.2.5 lakhs in respect of
housing loan up to Rs.25 lakhs obtained during the year 2013-14, as against
the deduction allowed up to Rs. 1.5 lakh in normal Total Cost of construction
shall not exceed Rs. 40 lakhs in this case. (Click here for detailed discussion
on additional deduction
3. Deduction of Premium up to 15% of sum assured in respect of Life
Insurance Policies covering the life of persons with disabilities defined in
Section 80U and Section 80 DDB

Rates of income-tax in respect of income liable to tax for

the year 2013-14 Assessment Year 2014-15
Paragraph A of Part-III of First Schedule to the Bill provides following rates
of income-tax:-

(i) The rates of income-tax in the case of every individual (other than those
mentioned in (ii) and (iii) below) or Hindu undivided family or every association
of persons or body of individuals , whether incorporated or not, or every
artificial juridical person referred to in sub-clause (vii) of clause (31) of section
2 of the Income-tax Act (not being a case to which any other Paragraph
of Part III applies) are as under :Upto Rs. 2,00,000

Nil.

Rs. 2,00,001 to Rs. 5,00,000

10 per cent.

Rs. 5,00,001 to Rs. 10,00,000

20 per cent.

Above Rs. 10,00,000

30 per cent.

(ii) In the case of every individual, being a resident in India, who is of the age
of sixty years ormore but less than eighty years at any time during the
previous year,-

Upto Rs. 2,50,000

Nil.

Rs. 2,50,001 to Rs. 5,00,000

10 per cent.

Rs. 5,00,001 to Rs.10,00,000

20 per cent.

Above Rs. 10,00,000

30 per cent.

(iii) in the case of every individual, being a resident in India, who is of the age
of eighty years or more at anytime during the previous year,-

Upto Rs. 5,00,000

Nil.

Rs. 5,00,001 to Rs. 10,00,000

20 per cent.

Above Rs. 10,00,000

30 per cent.

Education Cess: 3% of the Income-tax.

SALARY INCOME INCLUDES :- PAY, DP, Band pay, Grade pay, DA,
OTA, BONUS, CCA, Honorarium, Children Education Allowance
Received, Pension, Subsistence Allowance, Governments Contribution
in New Pension Scheme, Transport Allowance above Rs.800/- per
month.

House Rent Allowance to the extent not exempted under Section 10

(13A) of Income Tax Act.

Agricultural Income. Click here for more details

Exemption under Section 10 (13A) in respect of HRA

Calculation Method:
Least of the following amount is to be treated as exempt from Income Tax.

Actual House Rent Allowance Received, or

Rent paid in excess of 10% of Pay in Pay band and Grade Pay or

50% of Pay in Pay band and Grade Pay if the employee is in

Chennai/Mumbai/Kolkatta/Delhi and 40% of Pay in Pay Band and Grade
Pay for the employees is in other places.

If the employees resides in his/her own house or in a house for which

he/she does not pay any rent, no HRA exemption is available.

For detailed Calculation of Exemption on HRA use this HRA Calculator

provided by GConnect

Income or Loss on House Property:

Interest paid on Loan obtained for constructing house property can not be
deducted as such. It should be treated as loss on house property and income
if any such as rent recived from the house property should be treated as an
income from House property.
Check this previous GConnect article and Calculator for exact details on
Income or Loss on House Property.

Changes in the Budget 2012-13 relating to deductions under

Chapter VI A
Deduction for life insurance premium
Deduction in respect of premium paid on life insurance policy issued on or
after 1 April 2012 is proposed to be allowed provided premium payable for any
of the years does not exceed 10% (presently 20%) of actual capital sum
assured (Section 80C). Corresponding amendment brought in Section 10D
Deduction for preventive health check-up
Under Section 80D, a deduction of Rs 5,000 is allowed for expenditure
incurred during the year by a tax payer on account of preventive health checkup of self, spouse, dependent children or parents
The above deduction to be within the overall limits of Rs 15,000 / Rs 20,000
prescribed under the said Section of the Act.
Deduction for interest on savings account

Deduction upto Rs 10,000 proposed to be allowed in respect of interest on

deposits (not being time deposit) in a savings account with a banking
company, co-operative society engaged in banking business and post office
(Section 80TTA).
Deductions under Chapter VIA in relation to donation payment
Deduction in respect donation (Section 80G and 80GGA) in excess of Rs
10,000 is proposed to be allowed only if such sum is paid by any mode other
than cash.
Apart from the above, there are no much changes in the Tax exemptions /
Deductions allowed under Chapter VI A compared to last year.

Applicable deductions under Chapter VI A for year 2012-13

(A.Year 2013-14)
A. Eligible deductions u/s 80C as per section 80C deduction eligible u/s
80C

NATURE OF INVESTMENT

REMARKS
For individual, policy
must be in
self or spouses or any

Life Insurance Premium

childs
name. For HUF, it may
be on
life of any member of
HUF

Sum paid under contract for

deferred annuity.

For individual, on life of

self,
spouse or any child.

Contribution made under

Employees Provident Fund, a Recognized
Provident Fund or

a superannuation fund
For individual, can be in
the
name of self/spouse, any
Contribution to PPF

child
& for HUF, it can be in
the name
of any member of the
family

Sum deposited in 10 year/15year

account of Post Office Saving
Bank, NSS, Unit linked Savings Certificate

of Post office, ULIP of LIC, UTI or other

approved Insurance companies
Contribution to notified deposit
scheme/Pension fund set up by
the National Housing Scheme
Certain payment made by way

Condition has been laid

of instalment or part payment of

that in

loan taken for purchase/

case the property is

construction of residential house

transferred

property.

before the expiry of 5

years
from the end of the
Financial
year in which possession
of
such property is
obtained by him,
the aggregate amount of
deduction of income so
allowed
for various years shall be
liable
to tax in that year.
Contribution to notified

Contribution to notified annuity

Plan of LIC(e.g. Jeevan Dhara)
or Units of UTI/notified Mutual
Fund.

annuity
Plan of LIC(e.g. Jeevan
Dhara)
or Units of UTI/notified
Mutual
Fund.

Subscription to units of a Mutual

Fund notified u/s 10(23D)

Subscription to deposit scheme

of a public sector, company
engaged in providing housing

finance
Subscription to equity shares/
debentures forming part of any
approved eligible issue of capital

made by a public company or

public Financial institutions
Available in respect of
Tuition fees paid at the time of

any two

admission or otherwise to any

children. Any payment

school, college, university or other

towards

educational institution

any development fees or

situated within India for the

donation or payment of

purpose of full time education of

similar

any two children

nature will not be

eligible.
The term of the deposit

Bank fixed deposits

should
not be less than five
years

Payment made as five year

time deposit in an account under

the Post Office

Other Deductions which are coming under Rs. 1 lakh limit as per Section
80 CCE:

Section

Nature of Deduction

Remarks

The premium must be

deposited to keep in

80 CCC

Payment of premia for annuity

force a

plan of LIC or any other

contract for an annuity

insurer Deduction is available

plan of the LIC or any

upto a maximum if

other insurer

Rs. 1,00,000/-

for receiving pension

from
the fund.
Further, in any year

80 CCD

Deposit made by an employee

where any amount is

in the

received from the

pension account of employee to

pension

the extent

account such amount

of 10% of his salary (New

shall be

Pension Scheme (NPS) will

charged to tax as

come under this category

income of
that previous year.

The aggregate amount of deduction under sections 80C, 80CCC and sub
section (1) of Section 80CCD shall not exceed Rs.1,00,000/-, except (Section
80CCE). However, contribution made by the Central Government or any
other employer to a pension scheme under section 80CCD(2) shall be
excluded from the limit of one lakh rupees provided under section 80CCE.
Deductions which are not coming under Rs. 1 lakh limit (Each deduction
will have limit mentioned against each)

Section

Nature of
Deduction

Remarks

Deposit made by
an employer in the

Section 80 CCE provides for the

pension account of

contribution made by the Central

80

employee to the

Government or any other employer to

CCD(2)

extent

a pension scheme under section

of 10% of his salary

80CCD(2) shall be excluded from the

(NPS employer

limit of one lakh rupees

contribution)
Payment of medical
insurance
premium.
Deduction is
available upto Rs.
15,000/- for
self/family and also
upto to
80 D

Rs. 15,000/- for

insurance in
respect of
parent/parents of
the assessee.
W.e.f.
1.4.2011(i.e. for
A.Y. 2011-12
& F.Y. 2010-11
onwards).

The premium
should be paid in respect of
health insurance of the
assessee, his/her family
members or his/her parents

The aforesaid will

also
include contribution
made
to the Central
Government
Health Scheme(not
exceeding Rs.
15000/-)
Deduction of Rs.
50,000/- in
respect of a)
expenditure
incurred on medical
treatment,(i
ncluding
nursing), training
and
80 DD

rehabilitation of a
handicapped
dependant
relative. Further, if
the
dependent is a
person with
severe disability a
deduction
of Rs.1,00,000/-

The handicapped dependant

should be a dependant
relative suffering a permanent
disability (including
blindness)or mentally
retarded, as certified by a
specified physician or
psychiatrist.
Note: A person with
severe disability means a
person with 80% or more
of one or more disabilities
as outlined in section 56(4)
of the persons with
disabilities (equal
opportunities protection of
rights and full participation )
Act.

shall be
available under this
section.
b) Payment or
deposit to
specified scheme
for
maintenance of
dependant
handicapped
relative.
Deduction of Rs.
40,000/- in
respect of medical
expenditure
actually paid.
Further, where the
expenditure is
incurred in
80 DDB

respect of
assessee or
dependent who is a
senior
citizen a deduction
of
Rs. 60,000/- or the
amount
actually paid which

Expenditure must be actually

incurred by resident assessee
on himself or dependant
relative for medical treatment
of specified decease or
ailment. The diseases have
been specified in Rule 11DD.
A certificate in form 10 I is to
be furnished by the assessee
from any Registered Doctor.

ever is
less will be
available.
Deduction in
respect of
payment in the
previous year of
interest on loan
taken from
a Financial
institution or
approved charitable
institution for higher
80 E

education of self or
higher
education of a
relative.
Higher education
means any
course of study
pursued
after senior

This provision has been

introduced to provide relief to
students taking loans for
higher studies. The payment
of the interest thereon will be
allowed as deduction over a
period of upto 8 years.
Further, by Finance Act, 2008
deduction under this section
shall be available not only in
respect of loan for pursuing
higher education by self but
also by spouse or children of
the assessee or a child where
assessee is a legal guardian

secondary
examination or its
equivalent

80 G

Donations to

The various donations

certain funds,

specified in Sec.80G are

charitable

eligible for deduction upto

institutions etc.

either 100% or 50% with or

without restriction as
provided in Sec. 80G (see
para 6.4)

Deduction available
is the
least of
(i) Rent paid less
80 GG

10% of total
income
(ii) Rs.2000/- per
month
(iii) 25% of total
income

1) Assessee or his spouse or

minor child should not own
residential accommodation at
the place of employment.
2) He should not be in receipt
of house rent allowance.
3) He should not have a selfoccupied
residential premises
in any other place.

Deduction of Rs.
50,000/- to
an individual who
suffers
from a physical
disability
80 GG

(including
blindness) or
mental retardation.
Further, in case of
individuals with
severe disability a
deduction
of Rs.75,000/-

Certificate should be
obtained from a Govt. Doctor.
The relevant rule is Rule 11D

permissible.
W.e.f. 1.4.2010 the
amount
of Rs. 75,000/shall be
enhanced to Rs.
1,00,000/Deduction u/s 80 G : In respect of Section 80G, no deduction should be
allowed by the employer/DDO, from the salary income in respect of any
donations made for charitable purposes. The tax relief on such donations as
admissible u/s 80G will have to be claimed by the taxpayer in the return of
income. However, DDOs, on due verification, may allow donations to the
following bodies to the extent of 50% of the contribution:
a. The Jawaharlal Nehru Memorial Fund,
b. The Prime Ministers Drought Relief Fund,
c. The National Childrens Fund,
d. The Indira Gandhi Memorial Trust,
e. The Rajiv Gandhi Foundation, and to the following bodies to
the extent of 100% of the contribution:
(1) The National Defence Fund or the Prime Ministers National Relief Fund,
(2) The Prime Ministers Armenia Earthquake Relief Fund,

(3) The Africa(Public Contribution-India) Fund,

(4) The National Foundation for Communal Harmony,
(5)

The

Chief

Ministers

Earthquake

Relief

Fund,

Maharashtra,
(6) The National Blood Transfusion Council,
(7) The State Blood Transfusion Council,
(8) The Army Central Welfare Fund,
(9) The Indian Naval Benevolent Fund,
(10) The Air Force Central Welfare Fund,
(11) The Andhra Pradesh Chief Ministers Cyclone Relief Fund, 1996,
(12) The National Illness Assistance Fund,
(13) The Chief Ministers Relief Fund or Lieutenant Governors Relief Fund, in
respect of any State or Union Territory, as the case may be, subject to certain
conditions,
(14) The University or educational institution of national eminence approved
by the prescribed authority,
(15) The National Sports Fund to be set up by the Central Government,

(16) The National Cultural Fund set up by the Central Government,

(17) The Fund for Technology Development and Application set up by the
Central Government
(18) The national trust for welfare of persons with autism, cerebral palsy
mental retardation and multiple disabilities. Subscription of long term
infrastructure bonds. A new section 80 CCF has been introduced vide Finance
Act, 2010. This provides that for F.Y. 2010-11(A.Y. 2011-12) and onwards a
further deduction upto Rs. 20,000/- shall be available, for subscription to long
term infrastructure bonds, notified by the Central Government.
RELIEF UNDER SECTION 89(1)
Relief u/s 89(1) is available to an employee when he receives salary in
advance or in arrear or when in one financial year, he receives salary of more
than 12 months, or receives profit in lieu of salary covered u/s 17(3). Relief
u/s 89(1) is also admissible on family pension, as the same has been allowed
by Finance Act, 2002 (with retrospective effect from 1/4/96).