Difference Between Conveyance & CCA City Compensation Allowance

Dear all
plz let me know about difference between conveyance & city compensation allowance

Conveyance means your traveling cost.
City compensation means in easy words hra that stands for house rent allowance

Dear Shivanand
Conveyance allowance as the very name sugegsts, is linked to daily travelling and thus it's scope is confined to one item of expense namely travelling. The scope of City Compensatory Allowance is wider as to include many items of expenses like HRA or telephone expense etc and may include travelling expenses also wherever such expense is not seperately given by a company.
B.Saikumar
HR & labour Law Consultant
Chipinbiz Consultancy Pvt.ltd
Mumbai
Mob:09930532927

Hello Friends,
I will differ in defining both component from my other other two cite hr member.
City Compensatory Allowance

This 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. This allowance is independent allowance and does not include other expenses which has been explained by our co member.
Conveyance:
Expenses incurred for local travelling is termed as conveyance. All out of station travelling is called travelling expenses.
Regards
Manjay | <manjay@malaygauri.com> |+91 9810507200
Malay Gauri Consultants Pvt. Ltd. | <www.malaygauri.com>

Dear Seniors,
CCA is a compensation given for the cost of living in that particular city while, Conveyance allowances are given for travelling expense to an employee or executive.It again depends on the company policies that how much amount will be given.
Regards
NIKITA
student AKGIM,
GHAZIABAD

Dear Shivanand

It goes without saying that the city compensatory allowance, as the very name itself is suggestive, is payable in cities but not in rural or semi-urban areas. It needs no seperate emphasis. Cost of living in indutry parlance is linked to the capacity of a standard family to buy core products of consumption like food articles. The Dearness allowance which is paid to an employee in both public and private sector is expected to neutralise the effect of cost of living. Apart from this an employee, living in city, has to incur many other expenses on house rent, travelling, education, fuel expenses which may be more in a city due to long distances or membeships in local reading clubs etc. which are peculiar to a city life to maintain a standard of living in a city.

Therefore, apart from D.A, the establishments pay allowances,like HRA or T.A or medical allowance etc seperately or in the form of a lumpsum allowance called City compensatory allowance. Such allwances are paid to afford a fair wage to enable the employee and his family in cities to mainatain a reasonable standard of living.Thus while Dearness allowance is linked to cost of living, city compensatory allowance is linked to standard of living and is not expected to perform the same function as dearness allowance. However where employees are not paid dearness allowance, probabaly it may cover such cost also.

B.Saikumar

HR & labour Law Consultant

Chipinbiz Consultancy Pvt.ltd

Mumbai

Mob:09930532927

CCA: This is applicable to the cities based on their status - like Class A has the bigger cities (like Delhi, Mumbai, Kolkata, Chennai, Bangaluru, Hyderabad etc while Class B has smaller cities like Pune, Jaipur, Rajkot, Coimbatore etc). This is based on the population and cost-of-living and CCA and the amount is admissible in the policies of the each Organisation. This has NO bearing on the DA, HRA etc. BTW, CCA has been abolished in the Central Govt (Indian) after the recommendation/acceptance of the 6th Central Pay Commission.
Conveyance Allow: This is fixed and is given to the employees for commute to the place of work from the residence and back. Rs 800 pm is not taxable (as of now). Any other travel - from the place of work to a third place - will be covered by a reimbursement / vehicle.
Rajusiachen

Dear Friends,
Can any one please guide on if any company want to implement CCA then how it should have to be calculated and what heads need to be taken into consideration?
Regards
Shilpa

Dear,
As many pointed out CCA is fully taxable within the slabs of IT (Salaried) for TDS purposes. Where as Conveyance Allw. is exempt subject to the limit (max Rs.9600/-p.a.)prescribed under IT Act.
kumar.s.

Hello,

Conveyance allowance (for all employees) was a concept introduced (for Government servants) in 4th pay commission (there was provision to pay this allowance to disabled employees earlier). This allowance is paid to an employee to take care of daily travel cost to the work place in the absence of any other assistance by way of a car, subsidized transport etc. The rate of allowance has a link to the city type and the status of the employee (based on scale of pay in Government). The quantum is the "hypothetic" average amount that a person of the status would incur to reach the place of duty during a month. Since the allowance is based on the assumption that the same HAS TO BE SPENT, it is exempt from income tax. In private sector, companies may pay a different rate higher than the Government rate, but for tax purposes can exempt the same quantum as is allowed for Government servants. If an employee is not expected to go to office being on tour / leave etc., this allowance is not to be paid (or taxed if paid in private sector). If an employee is provided with a staff car, the allowance is not to be paid.

CCA, on the other hand is an allowance paid to COMPENSATE extra cost of living in a bigger city (classified based on population) as an additional allowance only based on the place where the office of duty is located. The CCA is of compensatory nature and is fully taxable. The rate depends on the city and status of the employee. This can be assumed to be over and above the DA and HRA especially for the city in which the office is located.

While private companies can show portion of CTC as transport allowance to its employees to give them benefit of tax on par with Government employees, CCA is generally not an allowance being paid in private sector. Needless to say that employees for whom transport allowance is paid as part of their CTC should not be provided with staff car else the quantum will have to taxed.

Regards,

K Raajaram