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This allowance is paid to employees who are posted in big cities. The idea is to compensate the high cost of living in cities like Delhi, Mumbai, Bangalore, and other metropolitan cities. However, it is a fully taxable allowance. i.e. the amount of this allowance will be taxed with the salary received.

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Q: What is the meaning city compensatory allowance?
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What is city compensatory allowance?

an allowance which is such that when an employee moves frm one city to another it is callrd cca.


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