A fully taxable balancing component employers use to bring total fixed pay up to the agreed CTC figure.
Special Allowance is the catch-all component employers use to balance a salary structure — after Basic Salary, HRA, and other named allowances are fixed, whatever remains of the agreed CTC is bundled here. Unlike HRA or LTA, it carries no specific tax exemption and is generally fully taxable.
Because it's the most flexible line item in a salary structure, Special Allowance is often the component companies adjust first when restructuring pay — for example, to introduce a Flexible Benefit Plan or add a new allowance category.
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