Dear Rekha,
When the employee is willing to serve the entire notice period as stipulated in the contract of employment, the employer cannot unilaterally decide to reduce the notice period or relieve him/her earlier and ask any pay out in this regard. Strictly speaking, the employer has to pay the salary for the remaining notice period to the employee concerned as the move of the employer is a counter offer which requires the acceptance of the employee.
Anyway, it is better to check the notice clause of your appointment order and ensure whether any subsequent change applicable to all alike is made in this regard.