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Quantitative Reasoning – Taxable Income!

PSA 2014_XI_Q14. Part of India’s new tax scale is shown below.

PSA 2014_XI_Q14_1

Anshu pays  Rs. 20,000 more tax than Batuk. If Anshu earns Rs. 5,00,000 in that financial year,
how much does Batuk earn ?
(1) Rs. 4,00,000

(2) Rs. 1,00,000

(3) Rs. 2,00,000

(4) Rs. 3,00,000

Ans: Anshu earns Rs 5,00,000. Anshu pays 10% of (5,00,000- 2,00,000) = 30,000.

Thus, Batuk pays 30,000 -20,000 or 10,000 as tax. Rejecting out option (2) and (3) as he would have payed nil tax then.

If he earns, 3,00,000, tax to be paid = 10% of (3,00,000- 2,00,000) = 10,000. Option (4) fits in here.

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