sec 143 1 a notice

You cannot deduct the amount, your employer must have reduced it in your form 16....

Any assessee can correct his income while filing the return if there is any mistake in computing the income committed by the employer. Form 16 is not sacrosanct and the employee has the very right to correct it in his ITR. The law does not mandate to pay taxes on which tax is not due. Actually it is the wrongful act of the CPC in sending such notices and is a perfect example of tax terrorism.