Dear Sweta,
I don't think that recoverable loans and advances sanctioned to an employee could be treated as " income" earned by the individual and taxable under the Income Tax Act.
As you are well aware that salary slip is a periodical statement showing the gross salary earned by the employee, the statutory and other authorised deductions made and the net salary paid in a given wage/salary period.
Showing the amount and instalment number of recovery of loan in the salary slip would enable the employee to know the actual recovery under the head and the balance to be repaid by him.
Therefore, even in the absence of any statutory requirement relating to issue of salary slips and maintenance of Loans and Advances Register for employees, it would be an essential requirement both from accounting and HR view points.