Question

Mr. Kartar Singh age 48 years work in a private company his monthly income after deduction of allowances is Rs 42,000 and every month he contributed rupees 3000 to GPF he also bought rupees 15,000 worth NSE and donated 1200 the PM's relief fund. Compute his income tax.

Answer 1

Hint: List out the given facts in the question like monthly donation GPF and NSE, compute all of these in annually and then we know that income tax upto 250000 is nil. Use these to get the income more than 250000 and compute income tax on that

Complete step by step answer:
Now we have given the monthly income of Mr. Kartar Singh as Rs. 42000.
Then the annual income will be :\[42000 \times 12 = Rs.504000\]
Now his GPF contribution every month is Rs. 3000 so annual GPF will be: \[3000 \times 12 = Rs.36000\]
His NSC purchase is of Rs. 15000 and his donations to PM's fund is Rs. 1200
Now presently, the standard deduction claim is Rs. 40000.
So the total taxable income will be :
\[\begin{array}{l}
\therefore 504000 - 36000 - 15000 - 12000 - 40000\\
 = 504000 - (36000 + 15000 + 12000 + 40000)\\
 = 504000 - 103000\\
 = 401000
\end{array}\]
Now we know that income tax upto 250000 is nil.
Income tax per annum is taken 5%
So, income tax for 401000-250000 = 5% of 151000
\[\begin{array}{l}
\therefore 5\% of151000\\
 = \dfrac{5}{{100}} \times 151000\\
 = 5 \times 1510\\
 = 7550
\end{array}\]
So the income tax is Rs.7550

Note:
Income tax varies from time to time. I took it as 5% now but if in the question it will be given that income tax is x% where x can be any number then just in the last step change 5% with x% and compute the tax.