Allied & ICAR Exam Bank • ALLIED_2404MCQ • 2 Marks
Section 8: General Aptitude
Quantitative Aptitude
Subtopic: Ratios & Percentages
Question Statement:
A taxpayer pays 10% tax on the first Rs 2,50,000 of income above an exemption limit, and 20% on the remaining income. If an individual earning Rs 6,00,000 pays Rs 55,000 in tax, the tax exemption limit is:
Options:
(A) Rs 2,00,000
(B) Rs 2,50,000
(C) Rs 1,50,000
(D) Rs 1,80,000
Answer Key:
A
Step-by-Step Solution & Explanation
Let exemption limit be $E$. Slabs: $(E$ to $E+250000)$ at 10% tax $= 25000$. Remaining income above $(E+250000) = 600000 - E - 250000 = 350000 - E$. Tax $= 0.20(350000 - E)$. Total tax $= 25000 + 70000 - 0.20E = 95000 - 0.20E = 55000 \implies 0.20E = 40000 \implies E = 200000$ rupees.