Govind earned an annual salary of Rs 330000. His employer...

Govind earned an annual salary of Rs 330000. His employer deducted Rs 3000 per month from his salary for the first 11 months of the financial year. Find the amount of tax he paid (in $\mathrm{Rs}$ ) in the last month of that year using the information below. If the standard deduction is $45 \%$ of the salary or Rs 150000 , which ever is less. The income tax on the TI (taxable income) is calculated in the following manner. (i) Less than or equal to Rs $50000-$ Nil (ii) From Rs 50000 to Rs $100000: 20 \%$ of the amount exceeding Rs 50000 (iii) From Rs 100001 to Rs 150000 : Rs $10,000+30 \%$ of the amount exceeding Rs 100000 (iv) Above Rs 150000: Rs $25000+40 \%$ of the amount exceeding Rs 150000 (1) 6400 (2) 5600 (3) 4800 (4) 4600

Govind earned an annual salary of Rs 330000. His employer deducted Rs 3000 per month from his salary for the first 11 months of the financial year. Find the amount of tax he paid (in $\mathrm{Rs}$ ) in the last month of that year using the information below. If the standard deduction is $45 \%$ of the salary or Rs 150000 , which ever is less. The income tax on the TI (taxable income) is calculated in the following manner.
(i) Less than or equal to Rs $50000-$ Nil
(ii) From Rs 50000 to Rs $100000: 20 \%$ of the amount exceeding Rs 50000
(iii) From Rs 100001 to Rs 150000 : Rs $10,000+30 \%$ of the amount exceeding Rs 100000
(iv) Above Rs 150000: Rs $25000+40 \%$ of the amount exceeding Rs 150000
(1) 6400
(2) 5600
(3) 4800
(4) 4600

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Key Concepts

Progressive Taxation System

A progressive taxation system taxes income at increasing rates as the amount of taxable income goes up. It is structured in brackets where lower portions of income are taxed at lower rates, and higher portions at higher rates, ensuring that the tax burden increases with the ability to pay.

Tax Withholding

Tax withholding involves deducting a portion of an employee's salary each month throughout the year as an advance payment of the annual income tax. Any discrepancies between the total withheld and the final tax liability are adjusted at the end of the year.

Taxable Income

Taxable income is the portion of the annual income that remains after allowable deductions, such as the standard deduction, have been subtracted. It is the figure used to determine the tax owed according to the tax brackets.

Annual Salary

This is the total amount of money earned over the course of a year before any deductions or taxes are applied. It forms the basis for calculating taxable income and subsequent tax liabilities.

Standard Deduction

A standard deduction is a preset reduction applied to the annual salary to lower the taxable income. It is often defined as the lesser of a percentage of the salary or a fixed maximum amount, and it simplifies the process of tax computation by reducing the income on which tax is imposed.

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