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3 votes
Swornima is an unmarried nurse in a

hospital. Her monthly basic salary is Rs
48,000. She has to pay 1% social
security tax on her income up to Rs
5,00,000 and 10% income tax on Rs
5,00,001 to Rs 7,00.000. She gets 1
months' salary as the Dashain
allowance. She deposits 10% of her
basic salary in Citizen Investment Trust
(CIT) and gets 10% rebate on her
income tax. Answer the following
questions. (i) What is her annual
income? How much tax is rebated to
her? (iii) How much annual income tax
should she pay?

User Vinu
by
7.5k points

1 Answer

4 votes

To calculate Swornima's annual income and the amount of tax she should pay, let's break down the information provided:

Monthly basic salary: Rs 48,000

Social security tax rate: 1%

Income tax rate on income up to Rs 5,00,000: 0% (no tax)

Income tax rate on income from Rs 5,00,001 to Rs 7,00,000: 10%

Dashain allowance: 1 month's salary

Deposit in Citizen Investment Trust (CIT): 10%

Rebate on income tax: 10%

(i) Annual Income:

Swornima's monthly basic salary is Rs 48,000, so her annual basic salary would be:

Annual Basic Salary = Monthly Basic Salary x 12

= Rs 48,000 x 12

= Rs 5,76,000

Additionally, she receives 1 month's salary as the Dashain allowance, which we can add to her annual income:

Annual Income = Annual Basic Salary + Dashain Allowance

= Rs 5,76,000 + Rs 48,000

= Rs 6,24,000

Swornima's annual income is Rs 6,24,000.

(ii) Tax Rebate:

Swornima receives a 10% rebate on her income tax. To calculate the rebate, we need to determine her income tax first.

(iii) Annual Income Tax:

First, let's calculate the income tax for the range of income from Rs 5,00,001 to Rs 7,00,000. The tax rate for this range is 10%.

Taxable Income in this range = Rs 6,24,000 - Rs 5,00,000

= Rs 1,24,000

Income Tax in this range = Taxable Income x Tax Rate

= Rs 1,24,000 x 0.1

= Rs 12,400

Now, let's calculate the total annual income tax:

Total Annual Income Tax = Income Tax in the range Rs 5,00,001 to Rs 7,00,000

= Rs 12,400

Next, we calculate the rebate on income tax:

Tax Rebate = Total Annual Income Tax x Rebate Rate

= Rs 12,400 x 0.1

= Rs 1,240

Swornima's annual income tax is Rs 12,400, and she receives a tax rebate of Rs 1,240.

To summarize:

(i) Swornima's annual income is Rs 6,24,000.

(ii) Swornima's tax rebate is Rs 1,240.

(iii) Swornima should pay an annual income tax of R