Special Compensatory (Remote Locality) Allowance

The Special Compensatory (Remote Locality) Allowance is paid as Tough Location Allowance under the 7th CPC, by area category and pay level for remote postings.

Updated 18 July 2026 · Reviewed by Salary-Calculator.in

The Special Compensatory (Remote Locality) Allowance is the allowance that compensates a central government employee for the extra cost and difficulty of serving in a remote locality, a place set apart by distance, terrain or poor connectivity from the ordinary services of a town. It was one of a family of location-based compensatory allowances for hard postings, and under the 7th Central Pay Commission, notified through Department of Expenditure Resolution No. 11-1/2016-IC dated 6 July 2017, it is no longer paid under that name: it is subsumed into the Tough Location Allowance , drawn from the lower hardship cells of the Risk and Hardship Allowance matrix.

The change is one of form as much as amount. An employee posted to a remote area still draws a location allowance for that posting, but the allowance now comes from a single consolidated framework rather than a separately named and separately administered payment. The old name survives in the schedules of qualifying areas and in the language of the orders, which is why the allowance is still looked up under its former title even though the money is paid as Tough Location Allowance.

This article sets out what the allowance compensated, the standalone form it took under the 6th Central Pay Commission, the 7th CPC rationalisation that folded it into the Tough Location Allowance, the three tiers and their rates by area category and pay level, the rules that limit an employee to a single such allowance and bar it running alongside the Special Duty Allowance, the dearness-allowance escalator that keeps the rates current, and the tax position. The rates below are the base figures in the 2017 order alongside the current figures, which stand 25 per cent higher because dearness allowance has crossed 50 per cent.

What the allowance compensates

A remote-locality posting imposes costs that an ordinary station does not. Goods cost more where they must be carried in over a long or difficult route, medical care and schooling may be far off, and the isolation itself is a burden on the employee and the family. The Special Compensatory (Remote Locality) Allowance existed to offset that burden, so that a posting to a distant and ill-connected place did not leave an employee worse off than a colleague in a town on the same pay.

The allowance is compensatory, not a reward for risk. It is directed at the hardship of the location, the sheer difficulty of living and working there, rather than at any danger in the duty. That distinction places it, in the 7th CPC framework, at the hardship end of the Risk and Hardship Allowance matrix, in the cells where hardship is present but the high operational risk of a field or commando posting is not. A soldier in a counter-insurgency operation draws from a high-risk cell; a clerk in a remote sub-office draws a Tough Location tier for the hardship of the place alone.

The 6th CPC standalone form

Under the 6th Central Pay Commission the allowance was a payment in its own right, with a schedule of qualifying remote localities and a set of category rates. The scheduled areas were graded into parts by the degree of remoteness, and the rate an employee drew depended on the part the station fell in and on the employee’s grade pay, so a more remote station and a higher grade drew a larger amount. The scheme sat alongside the parallel compensatory allowances for hill areas, bad-climate areas and tribal areas, each with its own schedule and rates, and the four together formed the location-compensatory group.

That structure had grown piecemeal. Four separate allowances, each with its own list of areas and its own slab table, covered what was in substance one idea, that a hard location deserves compensation. The overlap and the administrative weight of running four parallel schemes were among the reasons the 7th CPC recodified the whole group.

The 7th CPC rationalisation into Tough Location Allowance

The 7th Central Pay Commission’s guiding move on allowances was consolidation, and the location-compensatory group was a clear candidate. The Commission recommended, and the Government accepted, that the Special Compensatory (Remote Locality) Allowance, the Special Compensatory (Hill Area) Allowance, the Bad Climate Allowance and the Tribal Area Allowance be subsumed into a single Tough Location Allowance . One allowance with three tiers replaced four separately named allowances, each of which had carried its own schedule and rate table.

The Tough Location Allowance is not a free-standing scheme with rates of its own. It is the name given to the three lowest hardship tiers of the Risk and Hardship Matrix, the cells R3H1, R3H2 and R3H3, where the location involves hardship without the high risk that lifts a duty into the field-area and operational cells. Folding the remote-locality allowance into these cells put it on the same footing as every other hardship posting in the government, judged on one scale, rather than on a scheme peculiar to itself.

The three tiers and their rates

The Tough Location Allowance has three tiers, drawn from the three matrix cells. Each carries two rates, a higher one for officers at Level 9 and above and a lower one for staff up to Level 8, the two-slab design that runs through the whole Risk and Hardship Matrix. The base rates in the 2017 order are shown alongside the current figures, which are 25 per cent higher:

Tier	Matrix cell	Up to Level 8, base (Rs.)	Up to Level 8, current (Rs.)	Level 9 and above, base (Rs.)	Level 9 and above, current (Rs.)
Tough Location Allowance-I	R3H1	4,100	5,125	5,300	6,625
Tough Location Allowance-II	R3H2	2,700	3,375	3,400	4,250
Tough Location Allowance-III	R3H3	1,000	1,250	1,200	1,500

The tier an employee draws is fixed by the area of the posting, not by the employee. A station scheduled in the most remote category attracts Tough Location Allowance-I, a middle category attracts Tough Location Allowance-II, and the mildest category attracts Tough Location Allowance-III. Within the tier, the pay level then decides which of the two rates applies. So two employees at the same remote station draw the same tier but different amounts if one is at Level 9 and above and the other up to Level 8, and the same employee draws a different tier on moving to a station scheduled in a different category.

How a locality is categorised

The matrix fixes the rate for each tier, but it does not by itself say which tier a particular station belongs in. That is decided by the schedule of qualifying areas and the administering ministry, carrying forward the remote-locality classification that the earlier scheme used. The scheduled areas run to the remoter tracts of the country: parts of Arunachal Pradesh and the other North-Eastern states, the Andaman and Nicobar Islands and Lakshadweep, and the distant reaches of the hill and border states, each area placed in one of the three tiers by the severity of its remoteness.

Because the placement is a scheduling decision, the authoritative tier for a given posting is the one set out in the relevant order for that area, not a judgement the employee makes. An employee posted to a scheduled station should confirm the tier and the rate against the order that classifies the station, since the same broad region can contain stations in different tiers depending on how remote each one is.

The one-allowance and no-Special-Duty-Allowance rules

Two rules limit the allowance so that a single posting does not draw compensation twice for the same hardship.

First, an employee draws only one Tough Location Allowance at a time. The tiers are not additive, and a station that might be described under more than one of the old headings, remote and hill and bad-climate together, still draws a single Tough Location Allowance at its assigned tier, not a sum across the headings the subsuming replaced. This is a direct consequence of the consolidation: because the four old allowances became one, an employee cannot reconstruct the old stack by claiming several tiers at once.

Second, the Tough Location Allowance is not admissible alongside the Special Duty Allowance , the allowance for service in the North-Eastern Region and in Ladakh. An employee posted to an area that qualifies for both is given the option to draw whichever is more beneficial, and draws that one alone. Since Special Duty Allowance is a percentage of basic pay and the Tough Location Allowance is a flat tier amount, the more beneficial choice depends on the employee’s pay, and the option lets each employee take the larger figure without the two ever being paid together.

How the rates rise with dearness allowance

The Tough Location Allowance rates carry the same dearness-allowance escalator as the rest of the Risk and Hardship Matrix: each rate rises by 25 per cent whenever dearness allowance rises by 50 per cent. The clause pegs the tiers to the same inflation index that drives dearness allowance, so they climb without a fresh order each time prices move.

The escalator has been triggered once. Dearness allowance reached 50 per cent with effect from 1 January 2024, which lifted every tier by 25 per cent, which is why the table above shows a base and a current column. Dearness allowance is now 60 per cent, but the next 25 per cent step-up in the Tough Location Allowance rates does not arrive until dearness allowance reaches 100 per cent, because the escalator moves in whole 50-point blocks. As no single consolidated order re-tabulates the enhanced figures, an employee should confirm the current tier rate with the Drawing and Disbursing Officer before making a claim.

Where the allowance sits among the location allowances

The remote-locality allowance is one of a set of location and hardship payments, and it helps to see how it relates to the others. The Special Duty Allowance and the hard area allowance compensate service in the North-Eastern Region, Ladakh and other defined difficult areas, on a percentage-of-pay basis, and the Tough Location Allowance cannot run with them. The island special duty allowance compensates service in the island territories on its own terms. The wider Risk and Hardship Allowance matrix holds the high-risk field and operational cells above the three Tough Location tiers.

Read together, these form a graded system: the sharpest operational danger sits at the top of the Risk and Hardship Matrix, the percentage-based special and hard-area allowances cover the defined difficult regions, and the Tough Location tiers, which is where the remote-locality allowance now lives, cover the hardship of a difficult location without high operational risk. The remote-locality allowance is the hardship-of-place payment within that system.

A worked example

Take an employee at Level 6, so up to Level 8, posted to a station scheduled in the top remote category, which attracts Tough Location Allowance-I. At the current enhanced rate the allowance is Rs. 5,125 a month, drawn over and above the basic pay of the level and the ordinary allowances such as dearness allowance and house-rent allowance. Over a year the posting adds Rs. 61,500 to the employee’s earnings for the hardship of the location.

Now suppose the same station also qualifies for the Special Duty Allowance because it lies in the North-Eastern Region. Special Duty Allowance is a percentage of basic pay, so for an employee whose basic pay is, say, Rs. 40,000, it would be a percentage of that figure. The employee is given the option and draws whichever is larger, the flat Rs. 5,125 Tough Location Allowance-I or the percentage-based Special Duty Allowance, but not both. The choice turns on the pay: a higher-paid employee is often better off with the percentage-based Special Duty Allowance, a lower-paid one with the flat Tough Location tier, which is why the option exists.

Tax treatment

The Tough Location Allowance is, as a rule, taxable as part of salary, and there is no general exemption for it as a class. A limited exemption for postings in remote or difficult and border areas survives under Section 10(14) of the Income-tax Act, 1961, read with Rule 2BB of the Income-tax Rules, for defined areas and up to specified amounts, but it is a targeted concession rather than a blanket one, and it applies mainly under the old tax regime. The default new regime under Section 115BAC withdrew the great majority of the Section 10(14) exemptions, so an employee in or opting for the new regime should treat the allowance as taxable unless a specific surviving exemption applies to the particular area.

Because the exemption depends on the exact area and the financial year, an employee with a substantial remote-area component should check the treatment of the specific posting rather than assume it is exempt. For the wider comparison see old versus new tax regime and income tax for central government employees .

The 8th CPC outlook

The 7th Central Pay Commission built the Tough Location Allowance and set the base tier rates, and the 25 per cent escalator has lifted them once since, from 1 January 2024. Whether the 8th Central Pay Commission keeps the three-tier consolidation, revises the rates, or re-draws the schedule of qualifying areas is not known, and no figure for the allowance after the 8th CPC can be stated as fact until that commission reports and its recommendations are accepted. Until then the position is the three Tough Location tiers, standing 25 per cent above the 2017 base figures, drawn one at a time and not alongside the Special Duty Allowance.

Frequently Asked Questions (FAQs)

What is the Special Compensatory (Remote Locality) Allowance?

It is the allowance that compensates a central government employee for the extra cost and difficulty of serving in a remote locality, a place cut off by distance, terrain or poor connectivity from the ordinary comforts and services of a town. It was one of a family of location-based compensatory allowances for hard postings, and under the 7th Central Pay Commission it is paid as the Tough Location Allowance rather than under its old name, drawn from the lower cells of the Risk and Hardship Matrix.

Does the Special Compensatory (Remote Locality) Allowance still exist as a separate allowance?

Not under its old name. The 7th Central Pay Commission subsumed it, along with the Special Compensatory (Hill Area) Allowance, the Bad Climate Allowance and the Tribal Area Allowance, into a single Tough Location Allowance with three tiers. An employee posted to a remote locality now draws the Tough Location Allowance of the tier assigned to that area, at the matrix rate for their pay level, in place of the separately named remote-locality allowance that existed under the 6th CPC.

How much is the Tough Location Allowance?

It has three tiers drawn from cells R3H1, R3H2 and R3H3 of the Risk and Hardship Matrix, each with two rates. At the current enhanced rates, Tough Location Allowance-I is Rs. 6,625 a month for Level 9 and above and Rs. 5,125 up to Level 8; Tough Location Allowance-II is Rs. 4,250 and Rs. 3,375; and Tough Location Allowance-III is Rs. 1,500 and Rs. 1,250. The base figures in the 2017 order were Rs. 5,300 and Rs. 4,100, Rs. 3,400 and Rs. 2,700, and Rs. 1,200 and Rs. 1,000, before the 25 per cent dearness-allowance rise.

Can I draw Tough Location Allowance and Special Duty Allowance together?

No. The Tough Location Allowance is not admissible alongside the Special Duty Allowance, which is paid for postings in the North-Eastern Region and in Ladakh. An employee posted to an area that qualifies for both is given the option to draw whichever is more beneficial, but not both at once. This prevents a single posting from attracting two location allowances for the same hardship.

Which areas qualify for the remote-locality allowance now paid as Tough Location Allowance?

The qualifying areas are the remote localities scheduled for the purpose, among them parts of Arunachal Pradesh, the Andaman and Nicobar Islands, Lakshadweep, and the remoter tracts of the hill and border states. Each scheduled area is assigned to one of the three tiers by the severity of its remoteness, and the tier fixes the rate. The classification of a specific station is made by the administering ministry, so the authoritative tier for a posting is the one in that ministry’s order.

Can I draw more than one Tough Location Allowance at the same time?

No. An employee draws only one Tough Location Allowance at a time, the one for the area of the current posting. The tiers are not additive, and a station that might arguably fall under more than one heading, remote and hill and bad-climate, still draws a single Tough Location Allowance at the tier assigned to it, not a sum of several.

Have the rates increased with dearness allowance?

Yes. The 2017 order provides that the Tough Location Allowance rates rise by 25 per cent each time dearness allowance rises by 50 per cent, the same escalator that runs through the whole Risk and Hardship Matrix. Dearness allowance reached 50 per cent on 1 January 2024, so the current rates stand 25 per cent above the base figures. The next 25 per cent step-up does not come until dearness allowance reaches 100 per cent.

Is the Tough Location Allowance taxable?

As a rule the amount is taxable as part of salary; there is no blanket exemption for it as a class. A limited exemption for remote-area and border-area postings survives under Section 10(14) of the Income-tax Act read with Rule 2BB for defined areas and amounts, but it is targeted and applies mainly under the old tax regime, which the default new regime under Section 115BAC largely withdrew. An employee should check the treatment of the specific posting for the relevant financial year.

What is the difference between Tough Location Allowance and Risk and Hardship Allowance?

Tough Location Allowance is not a separate scheme; it is the name for the three lowest hardship tiers of the Risk and Hardship Matrix, cells R3H1, R3H2 and R3H3, where the duty involves hardship of location without the high risk of a field or operational posting. The wider Risk and Hardship Allowance covers the whole matrix, including the high-risk cells for field-area, high-altitude and commando duty. A remote-locality posting sits at the hardship end, which is why it draws a Tough Location tier rather than a high-risk cell.

External references

References

Report of the Seventh Central Pay Commission, November 2015, Chapter 8.10 (Allowances Related to Risk and Hardship): recommendation to subsume the Special Compensatory (Remote Locality) Allowance, Special Compensatory (Hill Area) Allowance, Bad Climate Allowance and Tribal Area Allowance into the Tough Location Allowance, and the three-tier rates in cells R3H1, R3H2 and R3H3 of the Risk and Hardship Matrix.
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, including the Tough Location Allowance, the rule that only one Tough Location Allowance is admissible, and that it is not admissible alongside the Special Duty Allowance.
Sixth Central Pay Commission and the earlier Department of Expenditure and Department of Personnel and Training orders on the Special Compensatory (Remote Locality) Allowance (the standalone scheme, the schedule of qualifying areas, and the grade-pay-linked category rates that the 7th CPC replaced).
Ministry of Finance, Department of Expenditure, Office Memorandum No. 1/1/2024-E.II(B): dearness allowance revised to 50 per cent with effect from 1 January 2024, triggering the 25 per cent rise in the Risk and Hardship Matrix and Tough Location Allowance rates.
Income-tax Act 1961, Section 10(14) read with Rule 2BB of the Income-tax Rules (limited exemption for allowances granted for postings in remote, difficult and border areas, for defined areas and amounts).