Question

When you buy a home for Rs. 2,50,000 and pay 50% in tax. How much is tax?
A. Rs. 2,50,000
B. Rs. 1,25,000
C. Rs. 3,75,000
D. none of these

Answer 1

Hint:It is said that tax is 50% which means that tax is 50% of the cost of home. Thus find tax by taking 50% of home. Simplify and get tax in rupees.

Complete step-by-step answer:
It is said that a person buys a home for Rs. 2,50,000.
He has to pay the tax which is 50%of the cost of the house.
Thus the buyer has to pay property tax that is due from the date of closing until the end of the tax year.
Now these are a types of taxes which are imposed while buying a property, stamp duty, registration fees, value added tax (VAT) and service tax.
Hence tax given to us as 50%is the combined tax of all these.
Thus it is said that tax is 50% of the cost of the house.
\[\therefore \]Tax \[=50%\] of the cost of the house \[=\dfrac{50}{100}\times 2,50,000=\dfrac{1}{2}\times 2,50,000=1,25,000\].
Thus we got tax as Rs. 1,25,000.
Hence the tax is Rs. 1,25,000 when you buy a home for Rs. 2,50,000.
Option A is the correct answer.

Note:It is said that 50% is tax. Upon finding the value of tax, don’t add it along the amount for which house is bought, saying that is the total tax, which is wrong. Just find 50% of the amount for which the house is bought. That value is the tax.