XAT 2011 — QA & DI Question 11
Answer the following question based on the information given below.
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Total income tax payable is obtained by adding two additional surcharges on calculated income tax.
- Education Cess: An additional surcharge called ‘Education Cess’ is levied at the late of 2% on the amount of income tax.
- Secondary and Higher Education Cess: An additional surcharge called ‘Secondary and Higher Education Cess` is levied at the rate of 1% on the amount of income tax.
Sangeeta is a young working lady. Towards the end of the financial year 2009-10, she found her total annual income to be Rs. 3, 37, 425/-. What % of her income is payable as income tax?
Answer & solution
5.64
- B
6.82
- C
7.38
- D
8.10
- E
None of the above
Income = 3,37,425
Tax up to Rs. 1,90,000 = 0
Tax for the next Rs. 1,10,000 = 10% of 1,10,000
= Rs. 11000
Tax for the next Rs. 37425 = 20% of 37,425
= Rs. 7485
∴ Income tax = Rs. 18,485
Education cess = 18485 × 0.02
Secondary and higher education cess = 18485 × 0.01.
∴ Total income Tax payable = 18485 + 18485 × 0.02 + 18485 × 0.01 = Rs. 19039.55
∴ Required percentage = 19039.55 / 337425 × 100 ≈ 5.64%
Hence, option (a).