Dear friend,
I do hope that an understanding of the concepts of gratuity and CTC obtaining in the realm of employment, more particularly the statutory gratuity under the Payment of Gratuity Act,1972 would certainly dispel the doubts raised in your post.
1) Gratuity is a one-time-lump-sum terminal benefit payable to the employees on the termination of their employment after rendering a minimum qualifying continuous service of five years by an employer to whose establishment the Payment of Gratuity Act,1972 becomes applicable.
2) Since the amount of gratuity thus payable is an exclusive statutory liability of the employer, the employees have no monetary contribution from their side. The amount of gratuity payable is calculated on the basis of the last drawn wages/salary of the employee and the total no of qualifying service rendered in the same establishment. Thus it would be a heavy drain from the employer's pocket on a day it becomes due. Therefore, in order to eliminate the risk of inability of the employer to pay it when the occasion arises, the PG Act,1972 requires every employer to take up a compulsory insurance policy in this regard.
3) Cost of employment of an employee, on the other hand, denotes the sum total of expenses quantifiable in monetary terms and incurred by the employer from recruitment to termination of the contract of employment. It includes the gross salary comprising of basic pay and all other allowances payable under the terms of the contract of employment, statutory contributions payable by the employer, annual payments like statutory bonus, all other fringe benefits offered and paid as a measure of employee retention and so on. Thus the sum total of all these are projected in the CTC to make the offer of employment more attractive.
Therefore, under this notion -
CTC= Contractual Gross wages & all allowances+ Employer's Statutory monetary liabilities+ Contractual liabilities.
4) Hence what all the items mentioned in the CTC are expenses actually incurred towards the employee from employer's perspective. So no question of deduction from the actual gross monthly wages payable to the employee except statutory employees' contributions like EPF and ESI. In fact, such periodical contribution made by the employer would come to fruition only when the occasion for its payment to the employee arises.