Question

The table below shows income tax rates. Income p.a in K£ 1 - 3000 3001 - 5400 5401 -9,000 9001-13.500 Rate % 10 15 20 25 13,501 and above 30 Agnes earns a monthly salary of Ksh. 20,000 per month, Her house allowance is Ksh. 15000P.M. She is entitled to a personal relief of Ksh. 1260P.M. Her deductions are NHIF sh.960, cooperative loan sh. 3500 and service charge of Ksh.400 per month. Calculate a) the taxable income. (2mks)​

Answer 1

• Answer:

Hence, AGNES's ANNUAL TAXABLE INCOME is: 346560

• Explanation:

MAKE A PLAN:

Calculate AGNES's Total Monthly Income, Subtract her Deductions and Personal Relief, and Then Find Her Annual Taxable Income:

• SOLVE THE PROBLEM:

1) - Calculate AGNES's Total Monthly Income:

20000 + 15000 = 35000

2) - Calculate AGNES's Total Monthly Deductions:

960 + 3500 + 400 = 4860

3) - Calculate AGNES's MONTHLY TAXABLE INCOME:

35000 - 4860 - 1260 = 28880

4) - Calculate AGNES's ANNUAL TAXABLE INCOME:

28880 * 12 = 346560

• Draw The conclusion:

Hence, AGNES's ANNUAL TAXABLE INCOME is: 346560

I hope this helps you!