Composite Transfer Grant

The Composite Transfer Grant (CTG) is a lump sum paid to a central government employee on transfer, or on settlement after retirement, at 80% of the last month’s basic pay, where the move involves a change of station and the two stations are 20 km or more apart. It is fixed by paragraph 3(ii)(a) of Department of Expenditure Office Memorandum No. 19030/1/2017-E.IV dated 13 July 2017, which implemented the 7th Central Pay Commission recommendations on travelling allowance. The grant meets the packing, local cartage and incidental costs of shifting a household, and it is paid as a grant rather than against bills.

Three variations on the rate matter more than the rate itself. A transfer or a retirement settlement to or from the island territories of Andaman, Nicobar and Lakshadweep draws 100% of the last month’s basic pay. A move to a station less than 20 km away, or a move within the same city, draws one-third of the grant, and only where the household actually shifts. And since 6 January 2022 a retiring employee draws the full 80% even when settling at the last station of duty, where before that date the same retiree drew one-third.

This article covers the grant in full: the 80% rate and the 20 km condition, the island and short-distance rates, what counts as basic pay and what is excluded from it, the place of the grant among the four components of transfer travelling allowance, the husband-and-wife rule, the four situations in which nothing is payable, the retirement rules and the 2022 change, the entitlement of the family of an employee who dies in service, the 60-day and 180-day claim time limits, why the grant does not move with dearness allowance, the tax position, and worked examples at four pay levels.

The 80% rate and the 20 km condition

The Composite Transfer Grant is 80% of the last month’s basic pay where a transfer involves a change of station and the old and new stations are located 20 km or more from each other. That is the operative wording of paragraph 3(ii)(a) of Department of Expenditure Office Memorandum No. 19030/1/2017-E.IV dated 13 July 2017. “Last month’s basic pay” means the pay drawn in the level of the pay matrix in the month before the move, and 80% of that figure is the grant. An employee at Level 7 drawing Rs. 44,900 receives Rs. 35,920; one at Level 11 drawing Rs. 78,800 receives Rs. 63,040.

The 20 km test separates a genuine relocation from a nominal change of office. A posting between two stations far apart plainly uproots the household, and the full grant follows. A move that leaves the family in the same house is dealt with by the one-third rule below, and where the family does not move at all, nothing is payable.

The rate fell in 2017. Under the 6th Central Pay Commission the grant was one full month’s basic pay. At paragraph 8.15.41(b) of its report the 7th Central Pay Commission recommended paying it at 80% instead, applying the factor of 0.8 by which it rationalised percentage-based allowances generally, and the government accepted the recommendation in the order of 13 July 2017. So a transfer today puts four-fifths of a month’s basic pay in hand, not a whole month’s.

Island territories: the 100% rate

A transfer or a retirement settlement to or from the island territories of Andaman, Nicobar and Lakshadweep draws CTG at 100% of the last month’s basic pay, not 80%. The higher rate is in the same paragraph 3(ii)(a) of the Office Memorandum of 13 July 2017 that fixes the ordinary 80% rate, and paragraph 4(ii)(a) repeats it for a retirement settlement.

The 7th Central Pay Commission recorded the reason at paragraph 8.15.39 of its report: personnel posted in the island territories had sought a higher grant on account of the greater expenditure involved in moving household goods to and from the mainland. The Commission agreed, and recommended at paragraph 8.15.41(b) that the 100% rate continue while the mainland rate came down to 80%. Moving a household across water means sea or air freight, longer transit and a longer period of disruption than a road or rail move of the same weight.

The rate applies in either direction, to the islands or away from them, and it applies to a retiring employee settling in or leaving the islands on the same terms as to a serving employee on transfer. It sits alongside the other island-posting benefits, the island special duty allowance among them, which is paid for serving there rather than for moving.

Short moves and same-city transfers: one-third

One-third of the Composite Transfer Grant is admissible for a transfer to a station less than 20 km from the old one, and for a transfer within the same city, provided a change of residence is actually involved. Paragraph 3(ii)(b) of the Office Memorandum of 13 July 2017 sets both conditions, and they operate together rather than in the alternative.

The one-third is taken on the 80% grant, not on basic pay. For an employee whose last month’s basic pay is Rs. 60,000, the full grant would be Rs. 48,000 and the short-distance grant is Rs. 16,000, which works out to about 26.7% of basic pay. Reading the one-third against basic pay instead of against the grant is the commonest arithmetic error on this rule, and it overstates the entitlement by a quarter.

The change-of-residence condition does real work. Where an employee is transferred across a city but continues to live in the same house, nothing is payable, because there is nothing to pack and shift and the grant exists to meet the cost of shifting. The condition is established by a declaration of change of residence, discussed under the documentation heading below.

Basic pay excludes dearness allowance, NPA and MSP

Basic pay for the Composite Transfer Grant means the pay drawn in the level of the pay matrix and nothing else. Dearness allowance is not part of it, so the grant does not swell as the dearness allowance rate climbs. Paragraph 3(ii)(a) of the Office Memorandum of 13 July 2017 goes further and states that Non-Practising Allowance and Military Service Pay shall not be included as part of basic pay while determining entitlement for CTG.

That exclusion was a change, not a restatement. Until 2017 both were counted. The 7th Central Pay Commission found no justification for including them, recording at paragraph 8.15.41(b) that the expenditure and inconvenience involved in relocation on transfer or retirement is similar for all employees, and recommending that no other add-ons be allowed in basic pay while calculating CTG.

The effect on a claim is easy to state. A doctor of the Central Health Service whose pay slip shows Rs. 1,00,000 basic pay plus Rs. 20,000 Non-Practising Allowance has CTG worked out on Rs. 1,00,000, giving Rs. 80,000 and not Rs. 96,000. A defence officer’s grant ignores Military Service Pay on the same footing.

Place among the four components of transfer travelling allowance

Travelling allowance on transfer is a bundle of four components, and the Composite Transfer Grant is the second of them. Paragraph 3 of the Office Memorandum of 13 July 2017 lists them: the travel entitlement for self and family, the Composite Transfer and Packing Grant, the reimbursement of charges on transportation of personal effects, and the reimbursement of charges on transportation of conveyance. Paragraph 4 repeats the same four for a retiring employee.

The distinction between the second and the third row is where most confusion sits. CTG does not pay the freight on the household goods; the third component does, against receipts, and paragraph 3(iii) of the order makes the production of receipts mandatory for transfers to and from the North Eastern Region, the Andaman and Nicobar Islands and Lakshadweep. The travelling allowance article covers the other three components in detail, and the transportation of personal effects article covers the weight scales.

The word “composite” records what the grant replaced. A transfer imposes many small, hard-to-document costs: packing materials and labour, cartage from the house to the loading point, the short local journeys of the family between the residence and the station at each end, and a spread of incidentals that no single bill captures. Each was once claimed under its own head, generating paperwork out of proportion to the sums involved. The order of 13 July 2017 states that the transfer incidentals and the road mileage for journeys between the residence and the railway station or bus stand at the old and new station are already subsumed in the composite transfer grant and will not be separately admissible. The design trades precise reimbursement of each small item for a single pay-linked figure.

Husband and wife both transferred

Where a husband and wife are both government servants and both are transferred, the transfer grant is not paid twice in full for one household move. Paragraph 3(ii)(c) of the Office Memorandum of 13 July 2017 turns the entitlement on the gap between the two transfer orders:

• Both transfers ordered within 60 days of each other: the spouse transferred later receives no transfer grant.
• Transfers more than 60 days apart but within six months of each other: the spouse transferred later receives 50% of the transfer grant.
• Transfers six months or more apart: the existing provisions continue to apply, and each spouse draws the grant on the ordinary footing.

The spouse transferred first draws the full grant in every case. The rule reaches only the transfer grant and not the other three components, so the travel fares for the second spouse and any separate movement of effects remain admissible on their own terms. The same paragraph adds that the rules precluding the transfer grant on a transfer at the employee’s own request, or on a transfer other than in the public interest, continue to apply unchanged to a husband and wife as to anyone else.

When the grant is not admissible

Four situations produce no Composite Transfer Grant at all, and the first of them overrides every rate in this article.

No change of residence. Where the transfer does not result in the household actually shifting, nothing is payable, whatever the distance. The grant meets the cost of moving a home, so a move that leaves the home where it is has no cost to meet.

A temporary transfer. A temporary transfer means a transfer for a specified period not exceeding 180 days, and it carries travelling allowance on the tour scale rather than the transfer scale, so no CTG arises. Where a transfer is intended to be for 180 days or less, the transfer order must state so specifically. Where a temporary transfer is later extended beyond 180 days, the employee may claim on the transfer scale instead. No joining time is admissible on a temporary transfer either, only the actual transit time allowed on tour.

A transfer at the employee’s own request. Supplementary Rule 114 provides that travelling allowance may not be drawn on transfer unless the employee is transferred for the public convenience, and that a transfer at the employee’s own request should not be treated as a transfer for the public convenience. The bar is not absolute. The same rule allows the authority sanctioning the transfer to direct otherwise, for special reasons which should be recorded, so an employee whose own-request transfer serves an administrative purpose can be brought back within the grant by a reasoned order.

A short move without a change of residence. A transfer to a station under 20 km away, or within the same city, where the employee does not shift home, draws nothing rather than the one-third grant, because paragraph 3(ii)(b) makes the change of residence a condition of the reduced rate as well as the full one.

One procedural point protects the employee across the second and third of these. The disqualification has to appear on the face of the transfer order. Where the order says nothing about the move being at the employee’s request, and nothing about a period of 180 days or less, the transfer is treated as a public-interest transfer of the ordinary kind and CTG is admissible. Reading the transfer order for an “at own request” endorsement is therefore the first step in any claim.

The framework these conditions sit in is the Supplementary Rules, not the Fundamental Rules. Supplementary Rule 114 carries the public-convenience condition, Supplementary Rule 116 the general rules for journeys on transfer, and Supplementary Rule 147 the conditions of admissibility on retirement, all three of which the Office Memorandum of 13 July 2017 preserves expressly while replacing the rates beneath them. The family that may travel and shift at government cost is defined for travelling-allowance purposes in Supplementary Rule 2(8), and the small-family norms in paragraph 4(A) of the Annexure to Ministry of Finance Office Memorandum F. No. 10/2/98-IC and F. No. 19030/2/97-E.IV dated 17 April 1998 continue to apply.

Retirement and the removal of the 20 km condition in 2022

A retiring employee draws the Composite Transfer Grant at 80% of the last month’s basic pay, and since 6 January 2022 draws it in full even when settling at the last station of duty. Paragraph 4(ii) of the Office Memorandum of 13 July 2017 sets the retirement entitlement on the same four-component structure as a transfer, treating settlement after a career in service as a relocation in its own right.

The position before 2022 mirrored the serving employee’s. A retiree who settled 20 km or more from the last station of duty drew the full 80%; one who settled at the last station itself, or within 20 km of it, drew one-third under paragraph 4(ii)(b). Department of Expenditure Office Memorandum No. 19030/1/2017-E.IV dated 6 January 2022, in partial modification of paragraph 4(ii)(a) and (b) of the 2017 order, did away with the condition of 20 km from the last station of duty, subject to the condition that a change of residence is actually involved. The retiree submits a self-declaration certificate regarding change of residence in the prescribed format.

The money at stake is substantial. A retiree whose last basic pay was Rs. 1,12,400 and who stays in the same city, moving out of government accommodation into their own house, now draws Rs. 89,920 where before 6 January 2022 the same person drew about Rs. 29,973. The change removed a distinction that had penalised precisely the retiree with the least choice about where to settle, and it reaches the great majority of retirements, since most employees vacate government quarters at the last station rather than leave the city. CTG is paid along with the other settlement dues, so it lands with the pension and gratuity payments rather than separately.

Death in service: the grant to the family

The family of a government servant who dies while in service is entitled to travelling allowance on settlement, including the Composite Transfer Grant. Supplementary Rule 148 empowers a competent authority to grant such travelling allowance to the family as it deems fit, and the settlement entitlement is worked out on the same basis as for a retiring employee, on the last month’s basic pay of the deceased.

The relocation the grant compensates is real and usually urgent. A family that loses the employee must vacate government accommodation at the last station of posting, often to return to a home town, and faces the same packing, cartage and incidental costs as any other move. The grant is paid as part of the death-related settlement, alongside the family pension, the death gratuity and the other dues, which is what puts a lump sum in the family’s hands at the point they must uproot.

Time limit for submitting the claim

A claim for the Composite Transfer Grant on transfer must be submitted within 60 days of the date of completion of the journey, and a claim on retirement within 180 days. The limits are absolute in practice, because a claim submitted late is treated as time-barred and needs a fresh sanction to be entertained at all.

The limit was cut sharply in 2018. Department of Expenditure Office Memorandum No. 19030/1/2017-E.IV dated 13 March 2018 changed the time limit for submission of travelling-allowance claims on tour, transfer, training and journey on retirement from one year to 60 days succeeding the date of completion of the journey. Retirees found 60 days too short, because a settlement journey and the final movement of household effects often run past two months. Department of Expenditure Office Memorandum of even number dated 15 June 2021 responded by modifying the retirement limit from 60 days to 180 days, and stated expressly that the time limit for a claim on tour, transfer and training remains 60 days.

So the two dates diverge, and the divergence matters to a retiring employee who assumes the transfer limit applies. The 2021 order also allowed claims that had already been rejected under the 60-day limit of the 2018 order to be reconsidered by the ministry or department concerned.

Documentation and payment

The single fact that has to be established for the Composite Transfer Grant is the change of residence, and it is established by a self-declaration rather than by bills. A retiring employee submits a self-declaration certificate regarding change of residence in the prescribed format, under the Office Memorandum of 6 January 2022, and the certificate carries an acknowledgement that a false declaration attracts consequences under the pension rules.

The grant does not need proof of the underlying expenditure, because it is a composite figure and not a reimbursement. That is a real distinction from the third component of transfer travelling allowance, where paragraph 3(iii) of the Office Memorandum of 13 July 2017 makes the production of actual receipts and vouchers a condition of the claim for transporting personal effects, and makes it mandatory for transfers involving the North Eastern Region, the Andaman and Nicobar Islands and Lakshadweep. An employee who moves personal effects by private arrangement still needs those receipts for the freight, but not for CTG.

Payment follows the claim through the Drawing and Disbursing Officer and the Pay and Accounts Office in the ordinary way. On retirement the claim is settled along with the other retirement dues, once the retiree has transported the personal effects and filed the declaration, which is why the grant usually reaches a retiree in the same tranche as the gratuity rather than on the date of retirement itself.

Why the rate does not move with dearness allowance

The Composite Transfer Grant is 80% of basic pay, so it rises when basic pay rises and at no other time. An annual increment, a promotion to a higher level of the pay matrix, or a pay commission revision lifts the grant automatically. A dearness allowance revision does not touch it, because dearness allowance is not part of basic pay for this purpose.

This separates CTG from the rest of the travelling-allowance schedule. The Office Memorandum of 13 July 2017 carries an escalation clause under which the accommodation, food and travelling-charge ceilings, the road-mileage rates and the per-kilometre rates for transporting personal effects rise by 25% whenever dearness allowance rises by 50%. Dearness allowance reached 50% on 1 January 2024, so those figures have stood 25% above the printed base since that date. The clause never touched CTG, and it did not need to: a grant already expressed as a percentage of pay tracks pay without a separate mechanism, while a rupee ceiling printed in a 2017 order does not.

The practical consequence is that the grant for a given employee is fixed between increments and predictable in advance. An employee at Level 10, stage 1, drawing Rs. 56,100, knows the grant is Rs. 44,880 whatever dearness allowance does in the interim, and knows it will move to Rs. 46,240 when the next increment lifts basic pay to Rs. 57,800.

Tax treatment

The Composite Transfer Grant is exempt from income tax to the extent it is spent on the transfer, as a prescribed allowance granted to meet the cost of travel on transfer. Under the Income-tax Act, 1961 the exemption sat in Section 10(14)(i) read with Rule 2BB(1)(a) of the Income-tax Rules, 1962, and the Explanation to that sub-rule put the point beyond argument: an allowance granted to meet the cost of travel on transfer includes any sum paid in connection with transfer, packing and transportation of personal effects on such transfer. That is a precise description of CTG.

The statute changed on 1 April 2026 without changing the position. For the tax year 2026-27 the prescribed-allowance exemptions sit in the Table in Schedule III to the Income-tax Act, 2025 (Act No. 30 of 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 from the same date. The repealed Rule 2BB governs the return for the financial year 2025-26 filed during 2026.

The travel-on-transfer entry survives the default new regime, which is unusual. Most prescribed-allowance exemptions fall away under the default regime, now carried by Section 202 of the Income-tax Act, 2025 and formerly by Section 115BAC, but the travel, daily and conveyance allowances and the transport allowance for a disabled employee are retained. So an employee on the default regime who claims no other exemption still keeps this one, and the grant does not enter taxable salary to the extent it meets the cost of the move. The income tax for government employees article covers how the transfer payments sit within the salary computation.

Worked examples

The figures below assume a genuine change of residence and use the last month’s basic pay alone, excluding dearness allowance, Non-Practising Allowance and Military Service Pay.

The last two rows measure the 2022 change: the same retiree in the same circumstances draws Rs. 59,947 more than they would have before 6 January 2022. The medical-officer row measures the 2017 exclusion: counting the Non-Practising Allowance would have produced Rs. 96,000 rather than Rs. 80,000.

Bearing on the 8th Central Pay Commission

No Composite Transfer Grant figure for the period after the 8th Central Pay Commission can be stated as fact, because the 8th Central Pay Commission has not reported and no recommendation on travelling allowance has been accepted. Two things the commission could do are visible from the record of the last one: the 7th Central Pay Commission cut the grant from a full month’s basic pay to 80% by applying its general 0.8 factor to percentage-based allowances, and it removed Non-Practising Allowance and Military Service Pay from the basic pay used to compute it.

A pay commission revision lifts the grant even if the percentage is untouched, because the grant is a percentage of basic pay and a revision raises basic pay across every level. An employee drawing Rs. 56,100 today receives Rs. 44,880; the same cell after a revision produces a proportionally higher grant at the same 80%, without any separate order on CTG.

Until the commission reports and the government issues an order, the position is the one set by the Office Memorandum of 13 July 2017 as modified on 6 January 2022: 80% of the last month’s basic pay on a transfer of 20 km or more, 100% for the island territories, one-third for a short move with a change of residence, and the full 80% on retirement without any distance condition.

Related Articles

• Travelling allowance
• Transportation of personal effects
• Daily allowance on tour
• Mileage allowance
• Transfer
• Joining time
• Deputation allowance
• Basic pay
• Pay matrix
• Dearness allowance
• Non-Practising Allowance
• Military Service Pay
• Central Health Service
• Island special duty allowance
• Leave travel concession
• Allowances for central government employees
• Department of Expenditure
• Drawing and Disbursing Officer
• Superannuation
• Central government pension
• Death gratuity
• 6th Central Pay Commission
• 7th Central Pay Commission
• 8th Central Pay Commission
• Income tax for government employees
• Income-tax Act, 2025
• Section 115BAC: the default new regime
• Take-home salary for central government employees
• Central government employees in India

External references

• Department of Expenditure, travelling allowance orders
• Department of Expenditure, Travelling Allowance Rules order of 13 July 2017
• Department of Expenditure, time limit for TA claims on retirement, 15 June 2021
• Department of Personnel and Training
• Pensioners’ Portal, travelling allowance on retirement
• Income Tax Department

References

1. Ministry of Finance, Department of Expenditure, Office Memorandum No. 19030/1/2017-E.IV dated 13 July 2017, “Travelling Allowance Rules, Implementation of the Recommendations of the Seventh Central Pay Commission”, paragraph 3(ii) (Composite Transfer and Packing Grant at 80% of the last month’s basic pay on a transfer involving a change of station 20 km or more apart; 100% for the island territories; one-third for a transfer under 20 km or within the same city with a change of residence; the husband-and-wife rule; Non-Practising Allowance and Military Service Pay excluded from basic pay) and paragraph 4(ii) (the same components on retirement).
2. Ministry of Finance, Department of Expenditure, Office Memorandum No. 19030/1/2017-E.IV dated 6 January 2022, in partial modification of paragraph 4(ii)(a) and (b) of the Office Memorandum dated 13 July 2017 (the condition of 20 km from the last station of duty done away with for a retiring employee, subject to a change of residence actually being involved, on a self-declaration certificate in the prescribed format).
3. Ministry of Finance, Department of Expenditure, Office Memorandum No. 19030/1/2017-E.IV dated 13 March 2018 (time limit for submission of travelling-allowance claims on tour, transfer, training and journey on retirement changed from one year to 60 days succeeding the date of completion of the journey).
4. Ministry of Finance, Department of Expenditure, Office Memorandum No. 19030/1/2017-E.IV dated 15 June 2021 (time limit for submission of claims for travelling allowance on retirement modified from 60 days to 180 days; the 60-day limit retained for tour, transfer and training).
5. Report of the Seventh Central Pay Commission, November 2015, paragraphs 8.15.38 to 8.15.41 (the four components of travelling allowance on transfer; the island-territory representation; the recommendation to pay the Composite Transfer Grant at 80% of the last month’s basic pay by applying the factor of 0.8, to retain 100% for the island territories, and to exclude Non-Practising Allowance and Military Service Pay).
6. Supplementary Rules, Government of India: S.R. 2(8) (definition of family for travelling-allowance purposes), S.R. 114 (travelling allowance on transfer admissible only on a transfer for the public convenience, and the recorded-reasons exception for a transfer at the employee’s own request), S.R. 116 (general rules for journeys on transfer) and S.R. 148 (travelling allowance to the family of a government servant who dies while in service).
7. Ministry of Finance, Office Memorandum F. No. 10/2/98-IC and F. No. 19030/2/97-E.IV dated 17 April 1998, paragraph 4(A) of the Annexure (small-family norms for travel entitlement on transfer, preserved by the order of 13 July 2017).
8. Income-tax Rules, 1962, Rule 2BB(1)(a) with the Explanation to sub-rule (1), read with Section 10(14)(i) of the Income-tax Act, 1961 (an allowance granted to meet the cost of travel on transfer includes any sum paid in connection with transfer, packing and transportation of personal effects on such transfer), governing the return for the financial year 2025-26.
9. Income-tax Act, 2025 (Act No. 30 of 2025), in force from 1 April 2026, Schedule III (prescribed allowances) and Section 202 (the default regime), 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.