Dear Friend,
There may be many occurrence for loss of pay. It could be due to no leave credit in employee's account. It could be due to a fine. It could be due to unauthorized absence from duty or it could be also for regular absenteeism. It could also be due to a loan or an advance from the salary.
In simple terms If I have to tell you..it's no salary payable for a particular leave taken (No work / No pay). Suppose your gross salary is Rs. 20,000 out of which Rs. 10,000 is your basic pay, Rs. 5,000 as HRA and Rs. 5000 as Special Allowance and if you work for 31 days in March you'll be paid Rs. 18,800 after deduction from Provident fund Rs. 1200 (Rs. 10,000 x 12%).
Similarly, if you have no leave balance and you work for 25 days there would be a salary cut for 06 days on each allowance therefore your basic pay would be (Rs. 10,000 x 25/31)=Rs. 8065; HRA (5000x25/31)=Rs. 4032 and lastly special allowance (Rs. 5000x25/31)=Rs. 4032. Hence after deduction of EPF (8065x12%=968) you salary payable would be Rs. (8065+4032+4032)-968=Rs. 15,161.00
I hope it's clear to you.
Warm regards,
Umesh Chaudhary
(welcomeumesh@yahoo.com)