LEAVE ENCASH AND NOTICE PERIOD RECOVERY

HI TO ALL SENIORS OF THE CITEHR COMMUNITY!!
We are having the system of calculating PL encashment on BASIC + DA but while calculating notice pay period we are deducting on gross salary. I have been asked frequently to adjust the notice pay period against PL balance or deduction at BASIC+DA.
I want to know that whether we should adjust the notice pay period against Leave balance, or we should pay leave encashment on Gross salary.
I am aware that as per law leave encashment should be on BASIC +DA, but there is no clarification on notice pay period recovery.
Please guide me on this.....
Regards
Arvind

PL/Earned Leave can be encashed on BASIC or BASIC+DA (if DA is one of the component in the Salary).
Notice Pay should ideally be recovered on BASIC or BASIC+DA (if applicable) and not on Gross, because Gross Salary consists of lot of reimbursement components/perks/benefits/etc which should ideally be not recoverred.
Now, if you are computing the PL & Notice Pay on BASIC (or BASIC+DA wherever applicable), then I don't see any reason why you should not adjust the Notice period against the PL.
Please remember, whatever you do, ensure that you strictly adhere to it so that the leaving employee is not agrieved. It should be same for everybody.

PL/Earned Leave can be encashed on BASIC or BASIC+DA (if DA is one of the component in the Salary).
Notice Pay should ideally be recovered on BASIC or BASIC+DA (if applicable) and not on Gross, because Gross Salary consists of lot of reimbursement components/perks/benefits/etc which should ideally be not recoverred.
Now, if you are computing the PL & Notice Pay on BASIC (or BASIC+DA wherever applicable), then I don't see any reason why you should not adjust the Notice period against the PL.
Please remember, whatever you do, ensure that you strictly adhere to it so that the leaving employee is not agrieved. It should be same for everybody.

Dear Arvind,
Irrespective of the policy you follow make sure it is testifies bothways.
If PL encashment is on Basic + DA then the deduction/recovery should also be on the same principles. it is not just two have two yardsticks for same case.
You can always adjust the notice period against the balance PL as it is not going to make any difference if the payment and recovery are on the same principles.
Thanx
Parwez