Question

Jogen’s taxable income for 2010-11 is Rupees 5,00,000. The tax rates are:
(i) nil for first 1,50,000,
(ii) 10% for 1,50,001—3,00,000,
(iii) 20% for the remaining. What is his tax liability?

• A. Rs 45000
• B. Rs 50000
• C. Rs 55000
• D. Rs 60000

Hint:

Always split income into slabs and apply correct rate on excess only. First slab is usually tax-free.

Answer 1

The Correct Option is C

Step 1: Income segmentation as per slab
Total Income = Rs 5,00,000 Slab-wise:

First 1,50,000 → No tax
Next 1,50,000 (from 1,50,001 to 3,00,000) → 10%
Remaining 2,00,000 (from 3,00,001 to 5,00,000) → 20%

Step 2: Compute tax for each slab
\[ \text{10% on } 1,50,000 = \frac{10}{100} \times 1,50,000 = 15,000
\text{20% on } 2,00,000 = \frac{20}{100} \times 2,00,000 = 40,000 \] Step 3: Add both \[ 15,000 + 40,000 = \boxed{55,000} \] % Final Answer \[ \boxed{Rs\ 55,000} \]