Based on the following information
Total income tax payable is obtained by adding two additional surcharges on calculated income tax.
Education Cess : An additional surcharge called ‘Education Cess’ is levied at the rate of 2% on the amount of income tax.
Secondary and Higher Education Cess : An additional surcharge called ‘Secondary and Higher Education Cess` is levied at the rate of 1% on the amount of income tax.
Mr. Madan observed his tax deduction at source, done by his employer, as Rs. 3,17,910/-. What was his total income (in Rs.) if he neither has to pay any additional tax nor is eligible for any refund?
Solution
Madan's tax deduction at source = Rs. 3,17,910
From the table we can see that one can pay this much amount of tax if he earns more than 5 lakh.
Let say Madan's is Rs. x more than 5 lakhs. Therefore, Madan's total income = Rs. 500000+x.
Total income tax paid by Madan = 1.03{0.3*(x) + 0.2*(200000) + 0.1(140000)}
$$\Rightarrow$$ $$\dfrac{317910}{1.03} = 0.3x + 54000$$
$$\Rightarrow$$ x = 848835.
Therefore, Madan's total income = 500000+848835 = Rs. 1348835. Hence, option A is the correct answer.
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