Skip to content

NISM Certifications · NISM-Series-X-B: Investment Adviser (Level 2) · Concepts in Taxation

Meera, a resident individual aged 40, has total income under the old regime, after all deductions, of Rs 12,00,000, consisting wholly of salary. Using the old regime slabs for individuals below 60: nil up to Rs 2,50,000, 5% from Rs 2,50,001 to Rs 5,00,000, 20% from Rs 5,00,001 to Rs 10,00,000 and 30% above Rs 10,00,000, what is the tax before cess and any rebate or surcharge?

The tax before cess is Rs 1,72,500. It is 5% on Rs 2,50,000 (12,500), 20% on Rs 5,00,000 (1,00,000) and 30% on the remaining Rs 2,00,000 (60,000), which together total Rs 1,72,500.

  1. ARs 1,12,500Correct
  2. BRs 1,22,500
  3. CRs 1,72,500
  4. DRs 1,50,000

Explanation

Tax on the 2,50,001-5,00,000 slab is 5% of 2,50,000 = 12,500. The 5,00,001-10,00,000 slab is 20% of 5,00,000 = 1,00,000. Above 10,00,000, 30% of 2,00,000 = 60,000. Total = 12,500 + 1,00,000 + 60,000 = 1,72,500. So the correct option is Rs 1,72,500, not Rs 1,12,500, which omits the 30% slab.

Did you get it right without looking?

One question tells you little. A timed set on Concepts in Taxation shows your real accuracy, how long you take and where you lose marks.

Practise Concepts in TaxationFree diagnostic mock

More Concepts in Taxation questions