Recovery of salary by employer for short notice period

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sanwara agrawal

27 Points Posted on 07 July 2025

I left job in March 2025. My employer did not pay me salary of March 2025, rather it recovered 1,50,000 from my savings account in March 2025 for short period of notice given by me.

This 1,50,000 recovery is not adjusted by my employer in financial year 2024-25. In form 24q, they showed only salary paid to me in fy 2024-25 and no deduction of this recovery of salary is made, from salary already paid to me in said financial year while submitting form 24q for March 2025 quarter.

Whether my employer is correct, if not what to do to rectify it. My tax liability is increased substantially if no recognition is given to this recovery of salary.

Replies (5)

Quick Summary

An employer has recovered £150,000 from an employee's savings account due to a short notice period, rather than paying the final month's salary. The employee is concerned this recovery hasn't been correctly reflected in tax forms (24Q) for the financial year, potentially increasing their tax liability. The advice suggests contacting the employer to adjust the recovery, filing a revised Form 24Q, and checking Form 16 to ensure accuracy.

Rama chary Rachakonda

Master in Accounts & high court Advocate

7021 Points Posted on 08 July 2025

contact your employer and request them to adjust the recovery of Rs.1,50,000 in financial year 2024-25. 2. File a revised form 24Q, 3. check the form 16 to ensure that the recovery of salary is reflected correctly.

wren loren

24 Points Posted on 06 January 2026

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Liz Walter

22 Points Posted on 14 April 2026

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Jordan Michael

22 Points Posted on 14 April 2026

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Rushabh

Automation Expert

7887 Points Posted on 13 November 2026

The ₹1,50,000 recovery is not automatically deductible from salary already paid or taxable in FY 2024–25. Salary is generally taxable on a due-or-receipt basis, whichever is earlier. If your March 2025 salary became due in that financial year, it remains salary income even if unpaid; recovery of notice pay is a separate issue and does not, by itself, reduce that salary. If March salary was never paid or became due only later, the facts and employment terms may affect the treatment.

Form 24Q reports salary and TDS; it does not determine your final tax liability. Ask the employer for a written full-and-final settlement showing whether the ₹1,50,000 was recovered as notice-pay compensation, whether any March salary was due, and how the amount was treated in its payroll and tax records. If the employer’s salary/TDS reporting is factually wrong, request a corrected Form 24Q and Form 16. Do not claim the recovery as a salary deduction in your return without a defensible tax basis; the agreement, payslips and settlement statement are material.

This reconciliation is part of closing payroll and tax records when employment ends. Manual verification across settlement statements, Form 16 and TDS filings is difficult; automation can reduce repetitive work while professional judgment remains in control. At Jir AI, our 2,000+ AI agents and 650+ integrations streamline GST, ITR, TDS, TCS and other compliance workflows, helping reduce manual workload by up to 70%. For a smoother compliance workflow, connect with us on WhatsApp: https://wa.me/message/3HVOZ7HIY4ESC1