Comprehension

Based on the following information

Income - Tax Rates for Financial Year 2009 - 10
Individual & HUF below age of 65 years	Women below age of 65 years	Tax Rates
Income up to Rs. 1,60,000/-	Income up to Rs. 1,90,000/-	Nil
Rs. 1,60,001 to Rs. 3,00,000/-	Rs. 1,90,001 to Rs. 3,00,000/-	10%
Rs. 3,00,001 to Rs. 5,00,000/-	Rs. 3,00,001 to Rs. 5,00,000/-	20%
Above Rs. 5,00,001	Above Rs. 5,00,001	30%

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 rate 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.

Question: 1

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?

Show Hint

Always split income into correct tax slabs and then apply cess separately on the calculated tax. Avoid applying cess directly on income.

Updated On: Mar 7, 2026

5.64
6.82
7.38
8.10
None of the above

Hide Solution

Verified By Collegedunia

The Correct Option is A

Solution and Explanation

Step 1: Understand the tax slabs for women (below 65 years).
- Up to Rs. 1,90,000: Nil tax
- Rs. 1,90,001 – 3,00,000: 10% tax
- Rs. 3,00,001 – 5,00,000: 20% tax

Step 2: Break down Sangeeta’s income.
Her total income = Rs. 3,37,425
Taxable income = above Rs. 1,90,000 - For income between 1,90,001 and 3,00,000 = Rs. (3,00,000 – 1,90,000) = Rs. 1,10,000 taxed at 10%
Tax = Rs. 11,000 - For income between 3,00,001 and 3,37,425 = Rs. (3,37,425 – 3,00,000) = Rs. 37,425 taxed at 20%
Tax = Rs. 7,485

Step 3: Compute base tax.
Total base tax = 11,000 + 7,485 = Rs. 18,485

Step 4: Add Education Cess (2%) and SHEC (1%).
Cess = 3% of 18,485 = 0.03 × 18,485 = Rs. 554.55
So total tax = 18,485 + 555 ≈ Rs. 19,040

Step 5: Compute percentage of income.
\[ \text{Percentage tax} = \frac{19,040}{3,37,425} \times 100 \approx 5.64% \]

Final Answer:
\[ \boxed{5.64%} \]

Was this answer helpful?

Question: 2

Mr. Madan observed his tax deduction at source, done by his employer, as Rs. 3,17,910. What was his total income (in Rs.) if he neither has to pay any additional tax nor is eligible for any refund?

Show Hint

When solving income tax reverse-calculation problems, always include cess in the final step. Ignoring cess leads to incorrect results.

Updated On: Dec 19, 2025

13,48,835
14,45,522
14,47,169
15,70,718
None of the above

Hide Solution

Verified By Collegedunia

The Correct Option is A

Solution and Explanation

Step 1: Given data.
TDS deducted = Rs. 3,17,910
We need to find his total income.

Step 2: Assume income structure.
Let Madan’s income = Rs. (5,00,000 + x)
– First Rs. 1,60,000: Nil tax (as per slab for individuals).
– Next Rs. 1,40,000 (1,60,001 – 3,00,000): taxed at 10% = Rs. 14,000
– Next Rs. 2,00,000 (3,00,001 – 5,00,000): taxed at 20% = Rs. 40,000 So, up to Rs. 5,00,000 → Tax = Rs. 54,000

Step 3: For remaining income (x).
Income above Rs. 5,00,000 is taxed at 30%.
So, additional tax = 0.3x Total base tax = 0.3x + 54,000

Step 4: Add Education Cess.
Including 3% cess: \[ \text{Tax payable} = 1.03 \times (0.3x + 54,000) \]

Step 5: Use given condition.
We know tax = Rs. 3,17,910 \[ 3,17,910 = 1.03 \times (0.3x + 54,000) \] \[ \Rightarrow 0.3x + 54,000 = \frac{3,17,910}{1.03} \] \[ = 3,08,650 \] \[ \Rightarrow 0.3x = 2,54,650 \quad \Rightarrow x = 8,48,835 \]

Step 6: Compute total income.
Total income = Rs. 5,00,000 + Rs. 8,48,835 = Rs. 13,48,835

Final Answer:
\[ \boxed{13,48,835} \]

Was this answer helpful?