Question

If the Secondary Education cess is ₹500, and there is no rebatable component of Income tax declared, find the annual income if the person is 65 years old?

• A. ₹8,40,000
• B. ₹7,00,000
• C. ₹6,50,000
• D. ₹7,84,000

Answer 1

The correct option is B ₹7,00,000

Let the income tax be ₹x.
Secondary education cess = 1% of x
$\Rightarrow$ 500 = $\frac{1x}{100}$
$\Rightarrow$ x = ₹50,000
Income tax being paid is ₹50,000
We now have to check the tax Slab for Senior citizen because age mentioned is 65 years.
Upto ₹3,00,000 is exempted.
Income tax slab for the income between ₹3,00,000 to 5,00,000 = ₹10000
Hence the income tax that is paid is ₹50000 - ₹10000 = ₹40000
As we know it falls in 20% slab which is between ₹5 lakhs and ₹10 lakhs.
Let the remaining income be ₹y.
$\frac{20y}{100}$ = ₹40000
$\Rightarrow$ y = $\frac{40000\times 100}{20}$ = ₹2,00,000
$\therefore$ Total Income = ₹2,00,000 + ₹5,00,000 = ₹7,00,000