CAF-2 · Chapter 12 · Question 10 of 15
Mr. Y has a personal taxable income of Rs. 1,000,000 (represented as 'C') and an exempt share from an AOP of Rs. 500,000. His total income for rate purposes is Rs. 1,500,000 (represented as 'B'). The notional tax on Rs. 1,500,000 is Rs. 150,000 (represented as 'A'). Using the formula (A/B) x C, what is the actual tax payable by Mr. Y?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) B) Rs. 100,000
Explanation
The tax payable is computed using the formula (A/B) x C. (150,000 / 1,500,000) x 1,000,000 = Rs. 100,000.
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