dear friend,
you can pay more gratuity apart from the mandatory value as envisaged under the Gratuity Act. please note that the extra amount over the ceiling limit as specified under the Income Tax Rules (current Rs. 350,000) is liable to tax in the hands of the employee receiving the said amount. further please pay special attention to the Income Tax Rule in calculation of the gratuity as there is a difference between the IT Rule formula and Gratuity Act formula (relating to average salary - calculated on basis of 10 months in one case and 12 months in other case)
you can use any formula for the calculation of gratuity as long as the benefit available under your formula is not less than the benefit as would accrue if the formula as per the Gratuity Act was applied. please pay special attention to the amounts under Rs. 350,000/- as the some amount would attract tax even though it is within the ceiling limit. this is because the taxability is decided under the IT Rules.
hope this is of some help.
regards,
mxsingh