Question

If the Education cess is ₹500, and there is no rebatable component of Income tax declared, find the annual income if the person is 68 years old?

• A. ₹6,50,000
• B. ₹7,00,000
• C. ₹4,84,000
• D. ₹5,75,000

Answer 1

The correct option is D ₹5,75,000

Let the income tax be ₹x.
Education cess = 2% of x
$\Rightarrow$ 500 = $\frac{2x}{100}$
$\Rightarrow$ x = ₹25,000
Income tax being paid is ₹25,000
We now have to check the tax Slab for Senior citizen because age mentioned is 68 years.
Upto ₹3,00,000 is exempted.
Income tax slab for the income between ₹3,00,000 to 5,00,000 = ₹10000
Hence, the remaining income tax that is paid is ₹25000 - ₹10000 = ₹15000
As we know it falls in 20% slab which is between ₹5 lakhs and ₹10 lakhs.
Let the remaining income be ₹y.
$\frac{20y}{100}$ = ₹15000
$\Rightarrow$ y = $\frac{15000\times 100}{20}$ = ₹75,000
$\therefore$ Total Income = ₹75,000 + ₹5,00,000 = ₹5,75,000