Dear Shukla,
To my knowledge, Basic determines 50% or 40% of Gross Salary. There is no standard formula to fix Basic; it differs from company to company. We can fix it according to our company policies. As per statutory norms, Basic plays a major role in calculating P.F, H.R.A (House Rent Allowance), and Gratuity, etc. Therefore, while giving a breakup of salary, we have to consider these statutory obligations as they are very important to the employee.
In conclusion, there is no standard formula for fixing Basic. As mentioned before, it varies from company to company; generally, it is fixed at 40% to 50% of the gross salary.
I hope this clarifies things for you.
I wish you all the best.