Hello Naidu
If the employee who is terminated is in withdrawn status , in IT000(Actions) the payroll program will be executed only till the date the employee was active.
This will ensure his gross salary and taxable income will be projected only till the date of termination, and therefore income tax calculated likewise.
This is standard behavior.
Can you please test the scenario , and confirm if this is not the case.
Thanks and Kind Regards
Ramana