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The dearness-allowance of a person with basic salary Rs.7700 is increased to 132% from 125% and the tax deduction on both is increased to 22% from 20%. He got salary increased by
1. Rs.74.00
2. Rs.77.00
3. Rs.385.00
4. Rs.369.00
5. None of the above/More than one of the above

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Correct Answer - Option 1 : Rs.74.00

Given:

Basic salary = Rs.7700

Old DA = 125%

New DA = 132%

Old Tax deduction (TDS) = 20%

New Tax deduction (TDS) = 22%

Concept Used:

Gross salary = Basic salary + Dear allowance

Net Salary = Gross Salary - Tax deduction

Calculation:

Old DA = 125% of basic salary

⇒ (125/100) × 7700 = Rs.9625

Old Gross salary = Basic salary + Dear allowance

Old Gross salary = 7700 + 9625 = Rs.17325

Old TDS = 20% of Gross salary 

⇒ (20/100) × 17325 = Rs.3465 

Old Net Salary = Gross Salary - Tax deduction

Old Net salary = 17325 - 3465 = Rs.13860      ----(i)

New DA = 132% of basic salary

⇒ (132/100) × 7700 = Rs.10164

New Gross salary = Basic salary + Dear allowance

New Gross salary = 7700 + 10164 = Rs.17864

New TDS = 22% of Gross salary 

⇒ (22/100) × 17864 = Rs.3930

New Net Salary = Gross Salary - Tax deduction

New Net salary = 17325 - 3930 = Rs.13934      ----(ii)

Subtracting eqn i  from ii

Increase in Net salary = 13934 - 13860 = Rs. 74

 ∴ The salary got  increased by Rs. 74

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