Hi,
Going strictly by law of the land, leaves are not permissible during notice period.
Having said that, we in HR need to adopt a very flexible approach towards employees who are leaving as they are our brand ambassadors and advertisements. Send them off with a good taste. Send them off with a bad taste and you should expect some very acidic comments.
As a policy I have always passed on the benfit to the employee as long as there is no loss to the company. Since EL/PL are taxable, if some of these are adjusted, the employee stands to benefit. However, if the employee wants to avail leave and work an extra day to complete the exact number of days, so be it.
regards
Ajay