Understanding literature relates to the interpretation of a literary text in a specific perspective. The critical appreciation, analysis and establishing an opinion about the text are some of the important tools to understand a literary piece of work. For this purpose, a complete understanding of literary as well as critical theory is indispensible to move forward. There are various perspectives to understand literature, which may be divided into four major categories; these are Author oriented, Context oriented, Reader oriented and Text oriented. This paper presents the debates of understanding literature in the context of Deconstruction; a theory presented by Jacques Derrida. The main idea of this theory is to unveil those meanings of the text, which have not been revealed on the surface. A limited work is available in the field of Urdu Applied Criticism with special reference to Deconstruction; because this analytical approach has been ignored. This theory may be applied to understand literature with the help of discourse analysis, narratology, linguistic analysis and textual criticism.