Question 143

The cost of a house was X lakhs in 2005. After 3 years, the owner of the house sold it for 25% more than she paid it. But she has to pay a tax of 50% of the gain. The tax amount she has to pay is.

Solution

Cost of house in 2005 (in lakhs) = $$x$$

Profit % = 25%

=> Profit earned = $$\frac{25}{100} * x = \frac{x}{4}$$

Now, tax paid is 50% of the gain

=> Tax paid = $$\frac{50}{100} * \frac{x}{4} = \frac{x}{8}$$

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