About these allowances
Indian Central Government, defence and CAPF personnel get a structured set of allowances on top of basic pay + DA, designed to compensate for hardship, risk, deployment difficulty and remote postings. The 7th CPC and the Anomalies Committee report rationalised dozens of pre-existing allowances into a tighter framework with standardised amounts.
This calculator covers the most commonly applicable allowances post-7th CPC. Always verify rates with your latest pay slip / unit pay clerk — specific rates depend on rank, posting, and unit-level orders.
Tax treatment under Section 10(14)
Many of these allowances are exempt from income tax under Section 10(14) of the Income-tax Act read with Rule 2BB. The major exempt allowances:
- Counter-Insurgency Allowance — fully exempt for armed forces.
- Compensatory Field Area Allowance — fully exempt up to ₹2,600 / month.
- Compensatory Modified Field Area Allowance — fully exempt up to ₹1,000 / month.
- High Altitude Allowance — up to ₹1,060 / month for 9,000-15,000 ft, ₹1,600 / month above 15,000 ft (statutory cap; actual paid amount can be higher but only the cap is exempt).
- Special Compensatory (Hilly Areas) Allowance — up to ₹800 / month exempt.
SDA in NE region and Hard Area Allowance are fully taxable. The exemption above is from the actual amount paid — if your allowance exceeds the statutory cap, the excess is taxable.
7th CPC rate reference
Quick reference for the most common allowances (FY 2025-26 rates):
| Allowance | Rate | Tax treatment |
|---|---|---|
| Special Duty Allowance (NER, Sikkim, A&N, Lakshadweep, Ladakh) | 10% of basic pay | Taxable |
| Hard Area Allowance | 20% / 25% of basic (cell-based) | Taxable |
| Counter-Insurgency Allowance (Officers) | ₹16,900 / month | Exempt 10(14) |
| Counter-Insurgency Allowance (JCO / OR) | ₹6,000–₹10,000 / month | Exempt 10(14) |
| High Altitude Allowance Cat I (9,000-15,000 ft) | ~₹5,300 / month | Exempt up to ₹1,060 |
| High Altitude Allowance Cat II (15,000-18,000 ft) | ~₹13,300 / month | Exempt up to ₹1,600 |
| High Altitude Allowance Cat III / Siachen (18,000+ ft) | ~₹26,000 / month | Exempt up to ₹1,600 |
| Field Area Allowance | ₹6,000–₹10,500 / month | Exempt up to ₹2,600 |
| Risk Allowance (Cell I / II / III) | ₹2,700 / ₹3,400 / ₹6,750 / month | Largely exempt 10(14) |
Rates vary by rank and posting; refer to your unit’s pay-slip for exact amounts.
FAQ
What is Special Duty Allowance (SDA)?
SDA is a Central Government allowance for employees serving in North Eastern Region (NER) states, Sikkim, Andaman & Nicobar, Lakshadweep and Ladakh. Post 7th CPC, the rate is 10% of basic pay — uniform across all qualifying postings (earlier rates were 12.5%/25% which got rationalised).
What is Risk Allowance?
Risk Allowance is paid to employees in roles involving exposure to physical hazards — e.g., bomb disposal squads, tunnel engineers, certain CISF / NSG / NDRF roles, lab workers handling toxic substances, electricians on high-tension lines. Post 7th CPC, the rates are flat amounts depending on Cell of Risk classification (Cell I / II / III).
What is the Counter-Insurgency Allowance (CI Ops)?
For armed forces personnel deployed on counter-insurgency operations (J&K, North-East). Rates are flat amounts per month based on rank category. Post 7th CPC: typically ₹6,000–₹16,900/month for OR/JCO/Officer ranks, with field-area variants.
What is the High Altitude Allowance?
For armed forces personnel posted at altitudes above 9,000 ft. Three slabs: Category I (9,000–15,000 ft), Category II (15,000–18,000 ft), Category III (above 18,000 ft / Siachen). Post 7th CPC rates run roughly ₹5,300 / ₹13,300 / ₹26,000 per month respectively.
Are these allowances taxable?
Most field-deployment, hardship and risk-related allowances paid to defence and CAPF personnel are fully exempt from income tax under Section 10(14) read with Rule 2BB — specifically the “Counter-Insurgency Allowance”, “Compensatory Field Area Allowance”, “Compensatory Modified Field Area Allowance”, “High Altitude Allowance”, etc. SDA in NER and Hard Area Allowance are taxable.
Who decides the rates?
Allowance rates are revised at each Pay Commission (currently 7th CPC) and updated by DOPT / Ministry of Defence orders thereafter. The Anomalies Committee post-7th-CPC report rationalised many overlapping allowances into a smaller standard set with capped amounts.
What about Police personnel?
State Police forces follow their own pay rules. CAPF (CRPF, BSF, ITBP, SSB, CISF) follow Central Govt rules — they get Risk Allowance (where applicable), CI Ops allowance, Field Area Allowance and High Altitude Allowance under the same 7th CPC framework. Police-specific allowances vary by state.