Special Allowance is a salary component given to employees as an additional salary in order to meet certain requirements by the employer. HRA, leave allowance, medical allowance, etc come under the special allowance. Special allowance is fully taxable.
Special allowance differs from one company to another.
It constitutes any allowance granted to employees to satisfy specific expenses towards the efficient performance of duties in an office. Special allowance is typically the leftover component of the salary divided into basic, HRA, LTA, travel allowance, etc. After bifurcating, the remaining sum of cash which makes up the annual CTC forms a part of a special allowance.
Also, See: City Compensatory Allowance (CCA)
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