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The monthly salary of a person is Rs. 70,000, and he gets one month's salary as a festival bonus. He monthly deposits [tex]$10 \%$[/tex] of his salary in the Employees' Provident Fund. He pays Rs. 40,000 yearly as the premium for his life insurance. Based on the following income tax rates, answer the following questions:

\begin{tabular}{|l|l|l|l|}
\hline \multicolumn{2}{|c}{For Individual} & \multicolumn{2}{c|}{For Married Couple} \\
\hline Yearly Income & Tax Rates & Yearly Income & Tax Rates \\
\hline Up to Rs. 5,00,000 & 1\% & Up to Rs. 6,00,000 & 1\% \\
\hline From Rs. 5,00,001 to Rs. 7,00,000 & 10\% & From Rs. 6,00,001 to Rs. 8,00,000 & 10\% \\
\hline From Rs. 7,00,001 to Rs. 10,00,000 & 20\% & From Rs. 8,00,001 to Rs. 11,00,000 & 20\% \\
\hline
\end{tabular}

a. Find the total taxable income of the person.

b. Find the total tax amount paid by him in a year if he is an unmarried person.

c. By how much less income tax should he pay in a year if he is a married person? Calculate it.



Answer :

GinnyAnswer
Let's break down the scenario step by step to find solutions to the given parts of the question.

### a. Total Taxable Income

1. Monthly Salary (Rs. 70,000):
- Monthly salary: Rs. 70,000

2. Yearly Salary:
- Yearly salary without festival expense: Rs. 70,000 [tex]\(\times\)[/tex] 12 = Rs. 8,40,000

3. Festival Bonus:
- Festival bonus: Rs. 70,000

4. Total Yearly Salary Inclusive of Festival Bonus:
- Total yearly salary: Rs. 8,40,000 + Rs. 70,000 = Rs. 9,10,000

5. EPF Contribution:
- EPF contribution rate: 10%
- Monthly EPF contribution: Rs. 70,000 [tex]\(\times\)[/tex] 0.10 = Rs. 7,000
- Yearly EPF contribution: Rs. 7,000 [tex]\(\times\)[/tex] 12 = Rs. 84,000

6. Life Insurance Premium:
- Yearly insurance premium: Rs. 40,000

7. Total Taxable Income:
- Taxable income = Total yearly salary - Yearly EPF contribution - Yearly insurance premium
- Taxable income: Rs. 9,10,000 - Rs. 84,000 - Rs. 40,000 = Rs. 7,86,000

So, the total taxable income of the person is Rs. 7,86,000.

### b. Total Tax Amount (Unmarried Person)

Using the tax rates provided for an unmarried person:

1. Taxable Income Bracket Calculation:
- Up to Rs. 5,00,000: 1%
- From Rs. 5,00,001 to Rs. 7,00,000: 10%
- From Rs. 7,00,001 to Rs. 10,00,000: 20%

2. Tax Calculation:
- Tax on income up to Rs. 5,00,000: Rs. 5,00,000 [tex]\(\times\)[/tex] 0.01 = Rs. 5,000
- Tax on income from Rs. 5,00,001 to Rs. 7,00,000: (Rs. 7,00,000 - Rs. 5,00,000) [tex]\(\times\)[/tex] 0.10 = Rs. 2,00,000 [tex]\(\times\)[/tex] 0.10 = Rs. 20,000
- Tax on income from Rs. 7,00,001 to Rs. 7,86,000: (Rs. 7,86,000 - Rs. 7,00,000) [tex]\(\times\)[/tex] 0.20 = Rs. 86,000 [tex]\(\times\)[/tex] 0.20 = Rs. 17,200

3. Total Tax for Unmarried Person:
- Total tax: Rs. 5,000 + Rs. 20,000 + Rs. 17,200 = Rs. 42,200

So, the total tax amount paid by an unmarried person in a year is Rs. 42,200.

### c. Tax Difference if Married

Using the tax rates provided for a married person:

1. Tax Calculation:
- Up to Rs. 6,00,000: 1%
- From Rs. 6,00,001 to Rs. 8,00,000: 10%
- From Rs. 8,00,001 to Rs. 11,00,000: 20%

2. Tax Calculation for Married Person:
- Tax on income up to Rs. 6,00,000: Rs. 6,00,000 [tex]\(\times\)[/tex] 0.01 = Rs. 6,000
- Tax on income from Rs. 6,00,001 to Rs. 7,86,000: (Rs. 7,86,000 - Rs. 6,00,000) [tex]\(\times\)[/tex] 0.10 = Rs. 1,86,000 [tex]\(\times\)[/tex] 0.10 = Rs. 18,600

3. Total Tax for Married Person:
- Total tax: Rs. 6,000 + Rs. 18,600 = Rs. 24,600

### Tax Difference Calculation

1. Difference in Taxes:
- Tax difference: Tax (unmarried) - Tax (married)
- Tax difference: Rs. 42,200 - Rs. 24,600 = Rs. 17,600

So, if he is a married person, he should pay Rs. 17,600 less income tax in a year.

### Summary of Answers:

a. Total taxable income: Rs. 7,86,000.

b. Total tax amount (unmarried): Rs. 42,200.

c. Tax difference if married: Rs. 17,600.

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