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Income up to Rs. 5,00,000 is tax-free. Up to Rs. 10,00,000, income above Rs. 5,00,000 is taxed at 10% and if the income exceeds Rs. 10,00,000, the tax rate is 20% for income above Rs. 10,00,000. If the income of X is Rs. 15,00,000, then what percentage of his income will be paid as tax?

Income up to Rs. 5,00,000 is tax-free. Up to Rs. 10,00,000, income above Rs. 5,00,000 is taxed at 10% and if the income exceeds Rs. 10,00,000, the tax rate is 20% for income above Rs. 10,00,000. If the income of X is Rs. 15,00,000, then what percentage of his income will be paid as tax? Correct Answer 10%

Given:

The income of X = 1500000

Tax percentage above 500000 = 10%

Tax percentage above 1000000 = 20%

Formula used:

GM% = {(GM)/(TM)} × 100   (Where, GM = Gain marks, TM = Total marks)

Calculations:

⇒ The income of X above 5 lakh and below 10 lakh = 500000

⇒ The tax on income of X above 5 lakh and below 10 lakh = 500000 × (10/100) = 50000

⇒ The income of X above 10 lakh = 500000

⇒ The tax on income of X above 10 lakh = 500000 × (20/100) = 100000

⇒ The total tax will be paid by X = 50000 + 100000 = 150000

⇒ The tax% of the income of X = (150000/1500000) × 100 = (1/10) × 100 = 10%

∴ The required result will be 10%.

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