Bad Climate Allowance

The Bad Climate Allowance is paid today as Tough Location Allowance-III, at Rs. 1,500 a month for an employee at Level 9 and above and Rs. 1,250 up to Level 8, and has not been paid under its own name since 1 July 2017. The allowance compensates a central government employee posted at a station notified as having an unhealthy or adverse climate. Paragraph 8.10.62 of the 7th Central Pay Commission report subsumed it into the Tough Location Allowance and mapped it to the third tier, which draws the rate of cell R3H3 of the Risk and Hardship Allowance matrix. The rates are notified in Department of Expenditure Office Memorandum No. 3/1/2017-E.II(B) dated 19 July 2017, issued under Resolution No. 11-1/2016-IC dated 6 July 2017.

The mapping is fixed rather than a matter of local assessment, and that is the single point most often got wrong. The same paragraph sends the Tribal Area Allowance, the Sunderban Allowance and Special Compensatory (Remote Locality) Allowance Part D to the same third tier, sends Parts A and B of that allowance to Tough Location Allowance-I and Part C to Tough Location Allowance-II. Where a station falls under more than one of those headings, paragraph 8.10.63 gives the employee the higher rate, not the sum.

The Bad Climate Allowance was subsumed, not abolished. Its neighbour the Special Compensatory (Hill Area) Allowance was abolished outright from the same date, and conflating the two outcomes is the commonest error in secondary writing on the subject. This article sets out the tier and the current rates, where the rate came from, what the allowance meant under the 6th Central Pay Commission, the boundary with the Health and Malaria Allowance, the elections against the Special Duty Allowance and the Hard Area Allowance, the 25% escalator that fired on 1 January 2024, what leave and suspension do to it, why it adds nothing to a pension, and its treatment under the Income-tax Act, 2025.

Paid today as Tough Location Allowance-III

A notified bad-climate station carries Tough Location Allowance-III, cell R3H3, at Rs. 1,500 a month for Level 9 and above and Rs. 1,250 up to Level 8 since 1 January 2024. Paragraph 8.10.62 of the 7th Central Pay Commission report sets the mapping out item by item, and it does not leave the tier to the classifying authority’s judgement:

The third tier is the floor of the whole Risk and Hardship Matrix. R3H3 is the cell for low risk with low hardship, and no allowance in the matrix pays less. The bad-climate heading sits there because an unhealthy climate on its own, without remoteness of terrain or operational danger, is the mildest form of location hardship the Commission recognised.

Classification of a station for Tough Location Allowance is a Department of Expenditure function, exercised through Office Memorandum No. 3/1/2017-E.II(B) dated 19 July 2017 and its annexures. This differs from the field-area cells of the same matrix, which the press note recording the Cabinet decision of 28 June 2017 leaves at item 7(v) to the Ministry of Defence for defence personnel and to the Ministry of Home Affairs for the Central Armed Police Forces. An employee looking for the tier of a specific station reads the Department of Expenditure annexure, not the matrix table.

Current rates by tier and pay level

The three Tough Location Allowance tiers pay the following monthly amounts. The base rates took effect on 1 July 2017 and rose by 25% on 1 January 2024, when dearness allowance reached 50%.

Two facts fix the amount and nothing else enters it: the tier of the station, and whether the employee sits at Level 9 and above or at Level 8 and below in the pay matrix. The amount is a flat rupee figure, not a percentage of pay, so a Level 3 clerk and a Level 8 assistant at the same bad-climate station draw the identical Rs. 1,250, and a Level 10 officer and a Level 14 officer there draw the identical Rs. 1,500. The Level 8 to Level 9 break is the standard two-slab split used across all ten cells of the matrix.

Basic pay for these orders means the pay drawn in the prescribed pay level and nothing more. Department of Expenditure Office Memorandum No. 2/5/2017-E.II(B) dated 7 July 2017 excludes non-practising allowance, Military Service Pay and any other type of pay from basic pay for the purposes of the 7th CPC allowance orders. The exclusion matters here only for the level band, since the tier rate itself is a flat amount.

Where the tier rate came from

The three Tough Location tiers were priced off the old Special Compensatory (Remote Locality) Allowance, not off the bad-climate schedule. The 7th Central Pay Commission derived R3H1, R3H2 and R3H3 from Parts A and B, Part C and Part D of that allowance respectively, and then lifted the floor so that no allowance anywhere in the pay system fell below Rs. 1,000 a month. That floor is why R3H3 pays Rs. 1,000 at the base for Level 8 and below rather than a smaller derived figure.

The consequence for a bad-climate posting is that the rate carries no arithmetic trace of the old bad-climate rate table. The Commission did not revalue the climate payment and did not test whether any particular district still deserved one. It placed the heading in the lowest tier and let the remote-locality derivation set the money.

What a bad-climate posting meant under the 6th CPC

Under the 6th Central Pay Commission the Bad Climate Allowance was a payment in its own right, with a schedule of qualifying unhealthy-climate stations and a set of grade-linked rates. It sat alongside the parallel compensatory allowances for remote localities, hill areas and tribal areas, each carrying its own schedule and its own rate table, and the four together formed the location-compensatory group that the 7th CPC dismantled.

The logic was older than the 6th CPC and older than independence. A posting to a district of high heat and humidity, a malarial belt, or a tract of extreme seasonal weather was treated as a charge on the employee’s health that the pay of the grade did not capture. Unlike a risk allowance, it attached to nothing the employee did. It was paid for being posted there, whatever the duty, which is why it belongs with the hardship allowances and sits at the hardship end of the matrix rather than in the risk cells.

Why the 7th CPC subsumed it rather than abolishing it

The Commission’s move on the location group was consolidation, and the Bad Climate Allowance survived it. Four allowances became one with three tiers: the bad-climate, remote-locality, tribal-area and Sunderban allowances all now draw from the same three cells, and an employee posted at a station describable under more than one of them draws a single Tough Location Allowance. Consolidating them removed the schedules, the four separate rate tables and the scope to reconstruct a stack.

Its neighbour was abolished instead. The Special Compensatory (Hill Area) Allowance sits at item 158 of the abolition list, struck out on the finding that there is hardly any hardship involved at altitudes of 1,000 metres above sea level. The abolition took effect from 1 July 2017 through Department of Expenditure Office Memorandum No. 4/1/2017-E.II(B) dated 13 July 2017, superseding the entitlement granted by Office Memorandum No. 4(2)/2008-E.II(B) dated 29 August 2008. The Commission paired that abolition with a replacement rather than a bare withdrawal: High Altitude Allowance was extended to civilian employees at locations covered by it where neither Tough Location Allowance nor any other risk and hardship allowance is admissible.

Subsumed and abolished are different outcomes and produce different money. An employee at a notified bad-climate station has a live entitlement at Rs. 1,500 or Rs. 1,250 a month. An employee who drew hill-area allowance before 1 July 2017 has none under that heading at all, and reaches a payment only if the station qualifies for High Altitude Allowance or for a Tough Location tier on some other ground. Both allowances sat in the same 6th CPC group and only one of them survived. For the full list see allowances abolished by the 7th CPC.

Comparison with the three sibling location allowances

The four subsumed location allowances now differ only in the tier their old heading maps to and in what a station has to be to qualify.

The spread between the top and bottom tiers is a factor of about 5.3, and remoteness rather than climate is what buys the higher figure. A bad-climate station that is also a remote-locality Part A place therefore draws four times what the bad-climate heading alone would give.

Where a station falls in more than one category

Paragraph 8.10.63 of the 7th Central Pay Commission report settles the overlap in a single sentence: where a place falls in more than one category, “the higher rate of Tough Location Allowance will be applicable”. The employee draws one allowance, at the best tier the station qualifies for, and never a sum across the old headings.

This is the operative rule for most bad-climate postings, because the notified unhealthy-climate tracts overlap heavily with the tribal areas and with the lower remote-locality parts. A station listed both as a bad-climate area and in Part C of the old remote-locality schedule draws Tough Location Allowance-II at Rs. 4,250 or Rs. 3,375, not Tough Location Allowance-III at Rs. 1,500 or Rs. 1,250, and the difference is Rs. 2,750 a month for a Level 9 officer. The bad-climate heading therefore fixes a floor for the posting rather than a ceiling.

Outside the Tough Location family the matrix itself says nothing about drawing two allowances at once. Paragraph 8.10.78 leaves concurrent admissibility exactly where it stood before 2016, and paragraph 8.10.66 preserves every pre-2016 condition of admissibility attaching to a named allowance, so the pre-2016 instructions of the administering ministry decide each pair.

Election against the Special Duty and Hard Area allowances

Two elections attach to a Tough Location Allowance, and both come from the same order. Paragraph 8 of Department of Expenditure Office Memorandum No. 3/1/2017-E.II(B) dated 19 July 2017 states that Tough Location Allowance is not admissible along with the Special Duty Allowance, which is paid for service in the North-Eastern Region and in Ladakh, and then gives the employee an option: continue the Special Compensatory (Remote Locality) Allowance at the old 5th CPC rates, where it was admissible, together with Special Duty Allowance at the revised rate of 10% of basic pay.

The bar is narrower than it first reads. The choice is between one revised allowance and two allowances of which the location component is frozen at pre-revised rates, not between two revised allowances. Because Special Duty Allowance is a percentage of basic pay and Tough Location Allowance is a flat tier amount, which side wins depends on the employee’s pay level, and for a bad-climate station at the third tier the percentage-based allowance wins at almost any pay.

Paragraph 9 of the same order gives a parallel election. Hard Area Allowance is admissible alongside Island Special Duty Allowance, and the employee elects between that pair and the subsumed location allowances. This applies to the Andaman and Nicobar and Lakshadweep postings, where a station may qualify for both families.

A third election, outside these two, binds the Central Armed Police Forces. The Ministry of Home Affairs order of 22 February 2019 as circulated by the Central Reserve Police Force gives an election between a matrix allowance and Detachment Allowance, whichever is more beneficial.

The 25% escalator linked to dearness allowance

Every cell of the matrix, including R3H3, rises by 25% each time dearness allowance rises by 50 percentage points. Paragraph 8.10.66 of the 7th Central Pay Commission report states it in one sentence: “The rates will increase further by 25 percent each time DA rises by 50 percent.” Dearness allowance on the revised pay structure stood at 0% on 1 January 2016 and reached 50% with effect from 1 January 2024 by Department of Expenditure Office Memorandum No. 1/1/2024-E-II(B) dated 12 March 2024. That is one 50-point rise, so one 25% step has fallen due, and Tough Location Allowance-III moved from Rs. 1,200 and Rs. 1,000 to Rs. 1,500 and Rs. 1,250.

Dearness allowance is 60% from 1 January 2026, which is not a second 50-point rise, so the next 25% step arrives only when it reaches 100%. Applying the house rent allowance escalator to the matrix produces a second step that does not exist: the Government overrode the Commission on house rent allowance and set revisions at dearness allowance crossing 25% and 50%, notified in Office Memorandum No. 2/5/2017-E.II(B) dated 7 July 2017, while the matrix kept the original 50-point step untouched.

No order gives effect to a step, and none is required. The Department of Expenditure’s standing position, given to the Controller General of Accounts on 20 March 2024 and repeating an identical reply of August 2021, is that the escalation is self-executing. Some ministries have circulated confirmatory restatements of the arithmetic for their own drawing and disbursing officers, among them a Department of Telecommunications Office Memorandum of 20 June 2024 and a Department of Personnel and Training Office Memorandum of 25 April 2024, but those circulars create no entitlement. An employee looking for the order that raised the third tier to Rs. 1,500 on 1 January 2024 will not find one, and its absence is not an oversight.

Effect of leave, temporary duty and suspension

Leave of more than 30 days taken at a stretch stops Tough Location Allowance-III for the whole period of that leave. The rule began as a field-area provision: paragraph 8.10.72 of the 7th CPC report records that Highly Active Field Area, Field Area and Modified Field Area Allowance stopped where an employee proceeded on leave for more than fifteen days, and recommends raising that ceiling to thirty days. The Ministry of Home Affairs applied the same 30-day test to all Risk and Hardship Allowances for the Central Armed Police Forces by a clarification of 13 September 2019, and the Central Reserve Police Force circularised the point in October 2020 with the qualification that the bar bites only where more than 30 days is availed at a stretch. Leave of under 30 days is not counted.

Temporary duty away from the notified station is treated as absence from the area under the conditions attaching to the allowance itself, because paragraph 8.10.66 preserved every pre-2016 condition of admissibility.

Suspension stops the allowance. Fundamental Rule 53 gives a suspended government servant subsistence allowance, dearness allowance on it, and other compensatory allowances “subject to the fulfilment of other conditions laid down for the drawal of such allowances”. A Tough Location Allowance is payable only while the qualifying posting is actually held, so that condition cannot be met while the employee is under suspension.

Reckonability for pension, gratuity and the NPS contribution

Tough Location Allowance-III counts for none of the three, so a full career at bad-climate stations adds nothing to the retirement outcome. Rule 31 of the CCS (Pension) Rules 2021 defines emoluments for pension as the basic pay under the Fundamental Rules 1922 drawn immediately before retirement or death, plus non-practising allowance granted to a medical officer in lieu of private practice, with stagnation increment added by the Explanation. No other allowance enters, and rule 32 computes average emoluments over the last ten months on the same basis.

Retirement gratuity adds one item and one only to that figure, the dearness allowance admissible on the date of retirement or death. Rule 5(1) of the CCS (Implementation of National Pension System) Rules 2021, notified by G.S.R. 227(E) dated 30 March 2021, limits the contribution base to basic pay, non-practising allowance and admissible dearness allowance in a calendar month, and the Unified Pension Scheme runs on the same base as the National Pension System.

In cash terms, an employee at Level 8 who spends twenty years at notified bad-climate stations draws Rs. 1,250 a month for those years and carries none of it into the pension. Every rupee of pension value comes from the basic pay of the level, which is why the level and not the station decides what a career is worth at retirement.

Coverage: who draws it and who does not

Tough Location Allowance is the widest matrix item by headcount, because it absorbed location allowances that applied to civilian employees at qualifying stations across the country rather than to a service or a trade. The Department of Expenditure administers the civilian entitlement through Office Memorandum No. 3/1/2017-E.II(B) dated 19 July 2017.

Three other administering routes carry the same cell rates to their own personnel. Central Armed Police Forces personnel draw matrix allowances under Ministry of Home Affairs Office Memorandum No. II-27012/40/CF-3396706/2017-PF-I dated 31 July 2017, covering the Central Reserve Police Force, Border Security Force, Indo-Tibetan Border Police, Central Industrial Security Force, Sashastra Seema Bal and Assam Rifles. Defence personnel draw under Ministry of Defence letter No. 1(16)/2017/D(Pay/Services) dated 18 September 2017. Railway employees draw through Railway Board circulars issued from 2017, of which RBE No. 87/2017 dated 10 August 2017 placing Track Maintainers in R3H2 is the pattern.

State government employees are outside the scheme. A state has its own compensatory allowances for difficult and unhealthy postings, set by its own finance department, and a central government order carries no entitlement across. An employee on deputation from a state to a central post draws the central allowance for the period of the central posting, on the terms of the deputation.

Worked examples

An employee at Level 8, so in the lower band, posted to a notified bad-climate station carrying Tough Location Allowance-III draws Rs. 1,250 a month, or Rs. 15,000 over a year. The amount sits over and above the basic pay of the level, the dearness allowance and the house rent allowance, and it does not vary with any of them.

The same station for an employee at Level 10 pays Rs. 1,500 a month, or Rs. 18,000 over a year. The Rs. 250 gap between the bands is the whole effect of seniority on this allowance: it does not scale with the cell of the pay matrix and does not rise on an increment.

Now take a station that is both bad-climate and in Part C of the old remote-locality schedule. Paragraph 8.10.63 gives the higher rate, so the Level 8 employee draws Tough Location Allowance-II at Rs. 3,375 rather than Rs. 1,250, a difference of Rs. 25,500 a year, and the Level 10 employee draws Rs. 4,250 rather than Rs. 1,500.

Finally, take a bad-climate station inside the North-Eastern Region for an employee at Level 8 whose basic pay is Rs. 60,000. Special Duty Allowance at 10% of basic pay is Rs. 6,000 a month against the Rs. 1,250 third tier, so the employee takes the paragraph 8 option and draws Special Duty Allowance with the location component frozen at pre-revised rates. This is the ordinary outcome wherever the Special Duty Allowance reaches, and the third tier matters most at the many bad-climate stations it does not reach.

Tax treatment

Tough Location Allowance-III is taxable as salary in full. For the tax year 2026-27 the prescribed-allowance exemptions sit in the Table in Schedule III to the Income-tax Act, 2025, read with the Income-tax Rules, 2026 notified by Central Board of Direct Taxes Notification No. 22/2026, G.S.R. 198(E), dated 20 March 2026, which replaced the Income-tax Rules, 1962 with effect from 1 April 2026. No entry in that scheme names Tough Location Allowance or the Bad Climate Allowance, and none named either under Rule 2BB of the repealed 1962 Rules.

Two entries in the prescribed-allowance scheme sit close to a bad-climate posting without covering it. The special compensatory allowance in the nature of a border area, remote locality, difficult area or disturbed area allowance is capped by the notified place, and reaches a bad-climate station only where that station is separately notified for it. The uncongenial-climate entry, which reads on its face as though it were written for this allowance, is tied to high altitude, snow-bound areas and avalanche conditions in the Siachen sector, and does not reach an ordinary hot or humid district at low elevation.

The regime decides the rest. Under the default new regime the exemptions available are restricted to a short list from which the whole risk and hardship family is absent, so the allowance is fully taxable for an employee who has not opted out. An employee on the old regime is in the same position on this allowance specifically, because the exemption it would need does not exist. For the wider comparison see old versus new tax regime and income tax for central government employees.

Bearing on the 8th Central Pay Commission

Nothing about the allowance after the 8th CPC is on the record. The 8th Central Pay Commission was constituted by a Ministry of Finance notification of 3 November 2025 under the chairpersonship of Justice Ranjana Prakash Desai, with 18 months from constitution to submit its recommendations. It has not reported, so whether it keeps the three-tier consolidation, re-rates the cells, redraws the schedule of qualifying stations or restores a separate climate heading is unknown, and no post-8th-CPC figure for the allowance can be stated.

The position until it reports is the one set on 1 July 2017 and stepped once on 1 January 2024: Tough Location Allowance-III at Rs. 1,500 and Rs. 1,250 a month for a notified bad-climate station, one allowance at the higher rate where categories overlap, and no further escalation until dearness allowance reaches 100%.

Related Articles

• Tough Location Allowance
• Special Compensatory (Remote Locality) Allowance
• Tribal area allowance
• Hill area allowance
• Health and Malaria Allowance
• Risk and Hardship Allowance
• Special Duty Allowance
• Hard area allowance
• Island special duty allowance
• High altitude and Siachen allowance
• Field area allowance
• Project allowance
• Nursing allowance
• Allowances abolished by the 7th CPC
• Dearness allowance
• House rent allowance
• Transport allowance
• Allowances for central government employees
• Pay matrix
• Basic pay
• Salary by pay level
• Take-home salary for central government employees
• CCS (Pension) Rules 2021
• Central government pension
• Gratuity for central government employees
• National Pension System
• Unified Pension Scheme
• CCS Leave Rules
• Suspension
• Central Armed Police Forces
• CAPF constable salary
• Income tax for government employees
• Income-tax Act 2025
• Old versus new tax regime
• Department of Expenditure
• 7th Central Pay Commission
• 8th Central Pay Commission
• Central government employees in India
• 7th CPC salary calculator

External references

• Department of Expenditure, Ministry of Finance
• 7th Central Pay Commission report and orders, Department of Expenditure
• Ministry of Home Affairs
• Ministry of Defence
• Railway Board, Ministry of Railways
• Income Tax Department
• Central Board of Direct Taxes notifications

References

1. Report of the Seventh Central Pay Commission, 19 November 2015, Chapter 8.10 (Allowances Related to Risk and Hardship): paragraph 8.10.62 mapping the Bad Climate Allowance, Tribal Area Allowance, Sunderban Allowance and Special Compensatory (Remote Locality) Allowance Part D to Tough Location Allowance-III and Parts A, B and C to Tough Location Allowance-I and II; paragraph 8.10.63 on the higher rate where a place falls in more than one category; paragraph 8.10.66 on the 25% escalator and the preservation of pre-2016 conditions of admissibility; paragraphs 8.10.74 to 8.10.76 on the contents of cells R3H1, R3H2 and R3H3; paragraph 8.10.78 on concurrent admissibility.
2. Ministry of Finance, Department of Expenditure, Resolution No. 11-1/2016-IC dated 6 July 2017: Government decision on the 7th CPC allowances, effective 1 July 2017.
3. Ministry of Finance, Department of Expenditure, Office Memorandum No. 3/1/2017-E.II(B) dated 19 July 2017: Tough Location Allowance rates; paragraph 8 on the election against the Special Duty Allowance; paragraph 9 on the election involving the Hard Area Allowance and the Island Special Duty Allowance.
4. Ministry of Finance, Department of Expenditure, Office Memorandum No. 4/1/2017-E.II(B) dated 13 July 2017: abolition of the Special Compensatory (Hill Area) Allowance with effect from 1 July 2017, superseding Office Memorandum No. 4(2)/2008-E.II(B) dated 29 August 2008.
5. Ministry of Finance, Department of Expenditure, Office Memorandum No. 2/5/2017-E.II(B) dated 7 July 2017: definition of basic pay for the 7th CPC allowance orders, and the house rent allowance escalation schedule at dearness allowance of 25% and 50%.
6. Ministry of Finance, Department of Expenditure, Office Memorandum No. 1/1/2024-E-II(B) dated 12 March 2024: dearness allowance revised to 50% with effect from 1 January 2024, the rise that triggered the single 25% step in the Risk and Hardship Matrix.
7. Ministry of Home Affairs, Office Memorandum No. II-27012/40/CF-3396706/2017-PF-I dated 31 July 2017, placing Central Armed Police Forces personnel in the matrix cells; and Ministry of Defence letter No. 1(16)/2017/D(Pay/Services) dated 18 September 2017 for defence personnel.
8. Central Civil Services (Pension) Rules 2021, rules 31 and 32 (emoluments and average emoluments); Central Civil Services (Implementation of National Pension System) Rules 2021, G.S.R. 227(E) dated 30 March 2021, rule 5(1) (contribution base).
9. Income-tax Act, 2025 (Act No. 30 of 2025), in force 1 April 2026, Schedule III (prescribed allowances), the successor to Section 10(14) of the repealed Income-tax Act, 1961; and Central Board of Direct Taxes Notification No. 22/2026, G.S.R. 198(E), dated 20 March 2026, notifying the Income-tax Rules, 2026 with effect from 1 April 2026.