Question

Ramu earns Rs. 850,000 in a year. He is unmarried, and his total allowances are Rs. 400,000. If a man has to pay 20% income tax, find his income tax.

A. Rs. 130,000
B. Rs. 140,000
C. Rs. 150,000
D. Rs. 160,000

Bhawana earns Rs. 820,000 in a year. Her allowances are Rs. 400,000, and she pays an annual income tax of Rs. 63,000. Find the rate of income tax.
A. 15%
B. 18%
C. 20%
D. 25%

XYZ earns Rs. 1,800,000 in a year. If he pays Rs. 130,000 income tax every year at the rate of 25%, find the total allowances.
A. Rs. 400,000
B. Rs. 500,000
C. Rs. 600,000
D. Rs. 700,000

The monthly salary of a project manager is Rs. 55,000. He has annual allowances of Rs. 400,000. Find his annual income tax if he pays the income tax at the rate of 15% on the first Rs. 200,000 and 25% on the remaining sum of the taxable income.
A. Rs. 70,000
B. Rs. 80,000
C. Rs. 90,000
D. Rs. 100,000

Answer 1

The calculations provided reveal that Ramu's annual income tax is Rs. 90,000, Bhawana's tax rate is 15%, and XYZ's allowances calculation shows a possible error as it doesn't fit the given options. The annual income tax for the project manager is Rs. 45,000.

Step-by-step explanation:

The computation of income tax depends on understanding the concepts of gross income, allowances, taxable income, and the application of tax rates. We will use these concepts to solve problems involving the computation of income tax and determine the rate of income tax and total allowances.

Solution for Ramu:

Ramu's taxable income is his earnings minus allowances, so Rs. 850,000 - Rs. 400,000 = Rs. 450,000. The income tax he pays on this taxable income at 20% is Rs. 450,000 x 20% = Rs. 90,000.

Solution for Bhawana:

To find the tax rate, divide the tax paid by Bhawana's taxable income. Her taxable income is Rs. 820,000 - Rs. 400,000 = Rs. 420,000. The rate, therefore, is Rs. 63,000 / Rs. 420,000 = 15%.

Solution for XYZ:

To find the total allowances, we first calculate the taxable income using the tax rate and tax paid. We have Rs. 130,000 = 25% of taxable income, so the taxable income is Rs. 130,000 / 25% = Rs. 520,000. Since XYZ earns Rs. 1,800,000, the allowances are Rs. 1,800,000 - Rs. 520,000 = Rs. 1,280,000. However, this doesn't match the given options, indicating a possible error in the question or the options.

Solution for the project manager:

The project manager earns Rs. 55,000 monthly, so his annual income is Rs. 55,000 x 12 = Rs. 660,000. The taxable income, after subtracting allowances, is Rs. 660,000 - Rs. 400,000 = Rs. 260,000. Tax on the first Rs. 200,000 is 15%, which is Rs. 30,000, and tax on the remaining Rs. 60,000 at 25% is Rs. 15,000. The total tax is Rs. 30,000 + Rs. 15,000 = Rs. 45,000.