Question 92

A man's annual income has increased by Rs 2 laths but the tax on income that he has to pay has reduced from 20% to 16%. He now pays the same amount of tax as before. What is his increased income (in Rs laths)?

Solution

Let say, previous income was = x lakhs.

So, According to question,

$$x\times\ 0.20\ =\ \left(x+2\right)\times0.16$$

or, $$0.04x=\ 0.32.$$

or, $$x=\ \frac{0.32}{0.04}=8.$$

So, his increased income = $$8+2\ =\ 10\ lakhs.$$

B is correct choice.

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