Question

Mr. Mehta’s annual income is Rs 4,50,000 

i. If he does not have any savings by which he can claim deductions from his income, to which slab does his taxable income belong? ______ 

ii, What is the amount on which he will have to pay income tax and at what percent rate? on Rs _______ percentage _______ 

iii. On what amount will the cess be levied? _______

Answer 1

i. Rs 2,50,001 to Rs 5,00,000 

ii. 5% of (4,50,000 – 2,50,000) 

i.e. 5% of Rs 2,00,000 

iii. income tax = 5% of 2,00,000 

= (5/100) x 2,00,000 

= Rs 10,000 

∴ Education cess and Secondary and higher education cess will be levied on the income tax i.e., on Rs 10,000.