Dear Balaji,
There is no concept of deduction of gratuity from the employee, it is basically a provision which would be consider as the cost to the company. It also depends upon the companies to make their own provision in terms of maintaining accounts.
But as per Gratuity Act 4.81% should be considered as a provision and accordingly calculated and paid to the employee.
Under section 4 (C) 2 of The Payment of Gratuity Act, 1972 for every completed year of service or part thereof in excess of six months, the employer shall pay gratuity to an employee at the rate of fifteen days’ wages (Basic + Dearness Allowance) based on the rate of wages last drawn by the employee concerned:
Gratuity payable = [15 / 26] * [Last monthly salary drawn] * [Years of service].
Gratuity Calculation for monthly basis on its basic wages which is = (15/26) / 12 months =0.577 /12 = 4.81%
Regards,
Janardan