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in Commercial Mathematics by (33.5k points)
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Mr. Kartarsingh (age 48 years) works in a private company. His monthly income after deduction of allowances is ₹ 42,000 and every month he contributes ₹ 3000 to GPF. He has also bought ₹ 15,000 worth of NSC (National Savings Certificate) and donated ₹ 12,000 to the PM’s Relief Fund. Compute his income tax.

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Mr. Kartarsingh’s monthly income = ₹ 42,000

Mr. Kartarsingh’s yearly income = 42,000 x 12 = ₹ 5,04,000

Mr. Kartarsingh’s investment 

= GPF + NSC =

 (3000 x 12)+ 15,000 

= 36,000 + 15,000

= ₹ 51,000

Donation to PM’s relief fund = ₹ 12, 000 

∴ Taxable income 

= yearly income – (investment + donation) 

= 5,04,000 – (51,000 + 12,000) 

= 5,04,000 – 63,000 = ₹ 4,41,000 

Mr. Kartarsingh income falls in the slab 2,50,001 to 5,00,000. 

∴ Income tax = 5% of (Taxable income – 250000) = 5% of (4,41,000 – 2,50,000) 

\(\frac{5}{100}\) x 1,91,000 100 

= ₹ 9550 

Education cess = 2% of income tax

\(\frac{2 }{100}\) x 9550 

= 191 Secondary and Higher Education cess = 1% of income tax

= \(\frac{1}{100}\) x 9550 100 = 95.50 

Total income tax = Income tax + Education cess + Secondary and higher education cess 

= 9550 + 191 + 95.50 

= ₹ 9836.50 

∴ Mr. Kartarsingh’s income tax is ₹ 9836.50

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