TaxTMI 
TaxTMI 
If employer recovers notice period pay whether it should be deducted from Salary for Income tax purpose, pl let me know with supportings case laws/circulars thanks Mukund M Honkan
Notice period pay
17 Aug 2016 
1 Reply 
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Notice period pay recovery reduces taxable salary by deduction at full-and-final settlement and is reflected in Form 16.
When an employee resigns and fails to serve the agreed notice period, the employer recovers the unserved notice period pay by deducting that amount from the employee's Full and Final Settlement, reducing the salary payment and reflecting the deduction in Form 16, so the employee effectively receives the benefit of a lower taxable salary to the extent of the notice period pay recovery. (AI Summary)
When an employee resigns and fails to serve the agreed notice period, the employer recovers the unserved notice period pay by deducting that amount from the employee's Full and Final Settlement, reducing the salary payment and reflecting the deduction in Form 16, so the employee effectively receives the benefit of a lower taxable salary to the extent of the notice period pay recovery. (AI Summary)