Lesson 2
Taxation
Exercise 2.1
1. In Nepal, an officer level married civil servant earning Rs. 38,000 monthly pays Rs. 23,500 yearly as a premium of life insurance. If his / her income is calculated as a salary equal to 13 months in a year including festival allowance, how much income tax do they have to pay yearly. Find out. (Calculate according to the income tax ceiling mentioned on the previous page.)
Solution:
Here, monthly salary = Rs. 38,000
Annual income = 13 × Rs. 38,000
= Rs. 4,94,000
Life insurance premium = Rs. 23,500
Taxable income = Rs. 4,94,000 − Rs. 23,500
= Rs. 4,70,500
Now, writing the taxable income Rs. 4,70,500 according to the income tax ceiling,
Rs. 4,70,500 = Rs. 4,50,000 + Rs. 20,500
Again, annual income tax = 1% of Rs. 4,50,000 + 10% of Rs. 20,500
= (1/100) × 4,50,000 + (10/100) × 20,500
= 4,500 + 2,050
= Rs. 6,550
∴ The annual income tax to be paid is Rs. 6,550.
2. An employee working in an organization has to pay income tax at the rate of 1% up to Rs. 4,50,000 out of his income, above Rs. 4,50,000 up to Rs. 5,50,000 at the rate of 10%, above Rs. 5,50,000 up to Rs. 7,50,000 at the rate of 20% and above Rs. 7,50,000 to Rs.20,00,000 at the rate of 30%, how much income tax should be paid to the government by the employee earning Rs. 65,000 per month?
Solution:
Here, monthly salary = Rs. 65,000
Annual income = 12 × Rs. 65,000
= Rs. 7,80,000
Now, writing the taxable income Rs. 7,80,000 according to the income tax ceiling,
Rs. 7,80,000 = Rs. 4,50,000 + Rs. 1,00,000 + Rs. 2,00,000 + Rs. 30,000
∴ Annual income tax = 1% of Rs. 4,50,000 + 10% of Rs. 1,00,000 + 20% of Rs. 2,00,000 + 30% of Rs. 30,000
= (1/100) × 4,50,000 + (10/100) × 1,00,000 + (20/100) × 2,00,000 + (30/100) × 30,000
= 4,500 + 10,000 + 40,000 + 9,000
= Rs. 63,500
∴ The annual income tax to be paid to the government is Rs. 63,500.
3. Study the following table showing the income tax threshold for entrepreneurs doing business as a sole proprietorship:
Yearly Income (Rs.): 1 – 4,50,000, Rate of Tax: Tax free
Yearly Income (Rs.): 4,50,001 – 5,50,000, Rate of Tax: 10%
Yearly Income (Rs.): 5,50,001 – 7,50,000, Rate of Tax: 20%
Yearly Income (Rs.): 7,50,001 – 20,00,000, Rate of Tax: 30%
Yearly Income (Rs.): Above 20,00,000, Rate of Tax: 36%
Solution:
(a) Yearly income = Rs. 6,30,000
Here, taxable income Rs. 6,30,000 according to the income tax ceiling,
Rs. 6,30,000 = Rs. 4,50,000 + Rs. 1,00,000 + Rs. 80,000
Now, income tax = 10% × 1,00,000 + 20% × 80,000
= 10,000 + 16,000
= Rs. 26,000
∴ The tax to be paid is Rs. 26,000.
(b) Yearly income = Rs. 9,25,000
Here, taxable income Rs. 9,25,000 according to the income tax ceiling,
Rs. 9,25,000 = Rs. 4,50,000 + Rs. 1,00,000 + Rs. 2,00,000 + Rs. 1,75,000
Now, income tax = 10% × 1,00,000 + 20% × 2,00,000 + 30% × 1,75,000
= 10,000 + 40,000 + 52,500
= Rs. 1,02,500
∴ The tax to be paid is Rs. 1,02,500.
(c) Yearly income = Rs. 17,88,000
Here, taxable income Rs. 17,88,000 according to the income tax ceiling,
Rs. 17,88,000 = Rs. 4,50,000 + Rs. 1,00,000 + Rs. 2,00,000 + Rs. 10,38,000
Now, income tax = 10% × 1,00,000 + 20% × 2,00,000 + 30% × 10,38,000
= 10,000 + 40,000 + 3,11,400
= Rs. 3,61,400
∴ The tax to be paid is Rs. 3,61,400.
(d) Yearly income = Rs. 22,25,000
Here, taxable income Rs. 22,25,000 according to the income tax ceiling,
Rs. 22,25,000 = Rs. 4,50,000 + Rs. 1,00,000 + Rs. 2,00,000 + Rs. 12,50,000 + Rs. 2,25,000
Now, income tax = 10% × 1,00,000 + 20% × 2,00,000 + 30% × 12,50,000 + 36% × 2,25,000
= 10,000 + 40,000 + 3,75,000 + 81,000
= Rs. 5,06,000
∴ The tax to be paid is Rs. 5,06,000.
4. What is the total interest of Rs. 10 lakh deposited in a bank when calculated at the rate of 8.5% simple interest in 4 years? If 5% income tax is levied on that interest, then what is the net simple interest? Find out. (Thus, income tax paid on interest refers to the tax paid on investment income.)
Solution:
Here, Principal (P) = Rs. 10,00,000
Rate of interest (R) = 8.5% per annum
Time (T) = 4 years
Income tax on interest = 5%
Simple Interest (I) = (P × T x R) / 100
= (10,00,000 × 8.5 × 4) / 100
= (10,00,000 × 34) / 100
= 3,40,00,000 / 100
= Rs. 3,40,000
Now, income tax on the interest = 5% of Rs. 3,40,000
= (5/100) × 3,40,000
= 17,00,000 / 100
= Rs. 17,000
Again, net simple interest = Total simple interest - Income tax
= Rs. 3,40,000 - Rs. 17,000
= Rs. 3,23,000
∴ The total simple interest is Rs. 3,40,000, and the net simple interest after tax is Rs. 3,23,000.
Exercise 2.2
1. Find the value added tax based on the given table:
S.N | Price excluding value added tax | Rate of value added tax | Value added tax amount
(a) | Rs. 300 | 13% | ?
(b) | Rs. 750 | 13% | ?
(c) | Rs. 6,000 | 13% | ?
(d) | Rs. 3,75,000 | 13% | ?
(e) | Rs. 20,27,000 | 13% | ?
Solution:
(a) = 13% of Rs. 300 = (13 / 100) × 300 = Rs. 39
(b) = 13% of Rs. 750 = (13 / 100) × 750 = Rs. 97.50
(c) = 13% of Rs. 6,000 = (13 / 100) × 6,000 = Rs. 780
(d) = 13% of Rs. 3,75,000 = (13 / 100) × 3,75,000 = Rs. 48,750
(e) = 13% of Rs. 20,27,000 = (13 / 100) × 20,27,000 = Rs. 2,63,510
(a)
Solution:
Marked price without VAT = Rs. 35,000
Discount = 10%
VAT = 13%
Discount Amount = (10 / 100) × 35,000
= Rs. 3,500
Price after Discount = 35,000 - 3,500
= Rs. 31,500
VAT Amount = (13 / 100) × 31,500
= Rs. 4,095
∴ Total Price = 31,500 + 4,095
= Rs. 35,595
(b)
Solution:
Marked price without VAT = Rs. 6,500
Discount = 7.5%
VAT = 13%
Discount Amount = (7.5 / 100) × 6,500
= Rs. 487.50
Price after Discount = 6,500 - 487.50
= Rs. 6,012.50
VAT Amount = (13 / 100) × 6,012.50
= Rs. 781.63
∴ Total Price = 6,012.50 + 781.63
= Rs. 6,794.13
(c)
Solution:
Marked price without VAT = Rs. 25,700
Discount = 15%
VAT = 13%
Discount Amount = (15 / 100) × 25,700
= Rs. 3,855
Price after Discount = 25,700 - 3,855
= Rs. 21,845
VAT Amount = (13 / 100) × 21,845
= Rs. 2,839.85
∴ Total Price = 21,845 + 2,839.85
= Rs. 24,684.85
(d)
Solution:
Marked price without VAT = Rs. 1,450
Discount = 22.75%
VAT = 13%
Discount Amount = (22.75 / 100) × 1,450
= Rs. 329.88
Price after Discount = 1,450 - 329.88
= Rs. 1,120.12
VAT Amount = (13 / 100) × 1,120.12
= Rs. 145.62
∴ Total Price = 1,120.12 + 145.62
= Rs. 1,265.74
3. Calculate the price that the customer has to pay for the given goods:
(a)
Solution:
Price after discount = 90% of Rs. 35,000
= (90/100) × 35,000
= 0.9 × 35,000
= 31,500
Price with VAT = 113% of 31,500
= (113/100) × 31,500
= 1.13 × 31,500
= 35,595
∴ The price that the customer has to pay is Rs. 35,595.
(b)
Solution:
Price after discount = 92.5% of Rs. 6,500
= (92.5/100) × 6,500
= 0.925 × 6,500
= 6,012.5
Price with VAT = 113% of 6,012.5
= (113/100) × 6,012.5
= 1.13 × 6,012.5
= 6,794.125
∴ The price that the customer has to pay is Rs. 6,794.125.
(c)
Solution:
Price after discount = 85% of Rs. 25,700
= (85/100) × 25,700
= 0.85 × 25,700
= 21,845
Price with VAT = 113% of 21,845
= (113/100) × 21,845
= 1.13 × 21,845
= 24,684.85
∴ The price that the customer has to pay is Rs. 24,684.85.
(d)
Solution:
Price after discount = 77.25% of Rs. 1,450
= (77.25/100) × 1,450
= 0.7725 × 1,450
= 1,120.125
Price with VAT = 113% of 1,120.125
= (113/100) × 1,120.125
= 1.13 × 1,120.125
= 1,265.74
∴ The price that the customer has to pay is Rs. 1,265.74.
4. Calculate the actual price of the goods based on the information given in the following table:
S.N. a)
Marked price excluding VAT = Rs. 2,000
Rate of Discount = 8%
Rate of VAT = 13%
Solution:
Price after discount = Rs. 2,000 × (1 - 0.08) = Rs. 1,840
VAT amount = Rs. 1,840 × 0.13 = Rs. 239.20
Price with VAT = Rs. 1,840 + Rs. 239.20 = Rs. 2,079.20
S.N. b)
Marked price excluding VAT = Rs. 7,000
Rate of Discount = 15%
Rate of VAT = 13%
Solution:
Price after discount = Rs. 7,000 × (1 - 0.15) = Rs. 5,950
VAT amount = Rs. 5,950 × 0.13 = Rs. 773.50
Price with VAT = Rs. 5,950 + Rs. 773.50 = Rs. 6,723.50
S.N. c)
Marked price excluding VAT = Rs. 27,000
Rate of Discount = 20%
Rate of VAT = 13%
Solution:
Price after discount = Rs. 27,000 × (1 - 0.20) = Rs. 21,600
VAT amount = Rs. 21,600 × 0.13 = Rs. 2,808
Price with VAT = Rs. 21,600 + Rs. 2,808 = Rs. 24,408
S.N. d)
Marked price excluding VAT = Rs. 20,525.30
Rate of Discount = 10%
Rate of VAT = 13%
Solution:
Price after discount = Rs. 20,525.30 × (1 - 0.10) = Rs. 18,472.77
VAT amount = Rs. 18,472.77 × 0.13 = Rs. 2,401.4601
Price with VAT = Rs. 18,472.77 + Rs. 2,401.4601 = Rs. 20,874.2301 ≈ Rs. 20,874.23
S.N. e)
Marked price excluding VAT = Rs. 1,781,500
Rate of Discount = 7.5%
Rate of VAT = 13%
Solution:
Price after discount = Rs. 1,781,500 × (1 - 0.075) = Rs. 1,647,887.50
VAT amount = Rs. 1,647,887.50 × 0.13 = Rs. 214,225.375
Price with VAT = Rs. 1,647,887.50 + Rs. 214,225.375 = Rs. 1,862,112.875 ≈ Rs. 1,862,112.88
5. The marked price of a LED television set excluding value added tax is Rs. 37,500. If it is sold after 11% discount and 13% VAT is levied on it, how much will the consumer pay? Find out by calculation.
Solution:
Marked price excluding VAT = Rs. 37,500
Discount = 11%
VAT = 13%
Price after discount = Rs. 37,500 × (1 - 0.11) = Rs. 33,375
VAT amount = Rs. 33,375 × 0.13 = Rs. 4,338.75
Final price = Rs. 33,375 + Rs. 4,338.75 = Rs. 37,713.75
6. Find the marked price and discount amount based on the given table:
S.N. (a)
Rate of Discount = 20%
Rate of VAT = 13%
Price with VAT = Rs. 4,520
Marked price excluding VAT = ?
Discount Amount = ?
Solution,
(a) Here, Price with VAT = Rs. 4,520
Rate of Discount = 20%
Rate of VAT = 13%
Marked price excluding VAT = ?
Discount Amount = ?
Now, let the marked price excluding VAT = X
Price after discount = X × (1 - 0.20) = 0.8X
VAT amount = 0.8X × 0.13 = 0.104X
Price with VAT = 0.8X + 0.104X = 0.904X
Given Price with VAT = Rs. 4,520
0.904X = 4,520
X = 4,520 / 0.904 ≈ Rs. 5,000
Now, Discount Amount = 20% of Rs. 5,000
= 20/100 × Rs. 5,000
= Rs. 1,000
∴ Marked price excluding VAT = Rs. 5,000
∴ Discount Amount = Rs. 1,000
S.N. (b)
Rate of Discount = 10%
Rate of VAT = 13%
Price with VAT = Rs. 15,225
Marked price excluding VAT = ?
Discount Amount = ?
Solution,
(b) Here, Price with VAT = Rs. 15,225
Rate of Discount = 10%
Rate of VAT = 13%
Marked price excluding VAT = ?
Discount Amount = ?
Now, let the marked price excluding VAT = Rs. X
Price after discount = X × (1 - 0.10) = 0.9X
VAT amount = 0.9X × 0.13 = 0.117X
Price with VAT = 0.9X + 0.117X = 1.017X
Given Price with VAT = Rs. 15,225
1.017X = 15,225
or, X = 15,225 / 1.017 ≈ Rs. 14,970.60
Now, Discount Amount = 10% of Rs. 14,970.60
= 10/100 × Rs. 14,970.60
= Rs. 1,497.06
∴ Marked price excluding VAT = Rs. 14,970.60
∴ Discount Amount = Rs. 1,497.06
S.N. (c)
Rate of Discount = 15%
Rate of VAT = 13%
Price with VAT = Rs. 57,630
Marked price excluding VAT = ?
Discount Amount = ?
Solution,
(c) Here, Price with VAT = Rs. 57,630
Rate of Discount = 15%
Rate of VAT = 13%
Marked price excluding VAT = ?
Discount Amount = ?
Now, let the marked price excluding VAT = Rs. X
Price after discount = X × (1 - 0.15) = 0.85X
VAT amount = 0.85X × 0.13 = 0.1105X
Price with VAT = 0.85X + 0.1105X = 0.9605X
Given Price with VAT = Rs. 57,630
0.9605X = 57,630
or, X = 57,630 / 0.9605 ≈ Rs. 60,000
Now, Discount Amount = 15% of Rs. 60,000
= 15/100 × Rs. 60,000
= Rs. 9,000
∴ Marked price excluding VAT = Rs. 60,000
∴ Discount Amount = Rs. 9,000
S.N. (d)
Rate of Discount = 25%
Rate of VAT = 13%
Price with VAT = Rs. 21,151.52
Marked price excluding VAT = ?
Discount Amount = ?
Solution,
(d) Here, Price with VAT = Rs. 21,151.52
Rate of Discount = 25%
Rate of VAT = 13%
Marked price excluding VAT = ?
Discount Amount = ?
Now, let the marked price excluding VAT = Rs. X
Price after discount = X × (1 - 0.25) = 0.75X
VAT amount = 0.75X × 0.13 = 0.0975X
Price with VAT = 0.75X + 0.0975X = 0.8475X
Given Price with VAT = Rs. 21,151.52
0.8475X = 21,151.52
or, X = 21,151.52 / 0.8475 ≈ Rs. 24,952.94
Now, Discount Amount = 25% of Rs. 24,952.94
= 25/100 × Rs. 24,952.94
= Rs. 6,238.24
∴ Marked price excluding VAT = Rs. 24,952.94
∴ Discount Amount = Rs. 6,238.24
S.N. (e)
Rate of Discount = 15%
Rate of VAT = 13%
Price with VAT = Rs. 2,401.25
Marked price excluding VAT = ?
Discount Amount = ?
Solution,
(e) Here, Price with VAT = Rs. 2,401.25 (assuming Rs. 2,40125 is a typo for Rs. 2,401.25)
Rate of Discount = 15%
Rate of VAT = 13%
Marked price excluding VAT = ?
Discount Amount = ?
Now, let the marked price excluding VAT = Rs. X
Price after discount = X × (1 - 0.15) = 0.85X
VAT amount = 0.85X × 0.13 = 0.1105X
Price with VAT = 0.85X + 0.1105X = 0.9605X
Given Price with VAT = Rs. 2,401.25
0.9605X = 2,401.25
or, X = 2,401.25 / 0.9605 ≈ Rs. 2,500
Now, Discount Amount = 15% of Rs. 2,500
= 15/100 × Rs. 2,500
= Rs. 375
∴ Marked price excluding VAT = Rs. 2,500
∴ Discount Amount = Rs. 375
7. If the price of an electric kettle after allowing 5% discount on the marked price excluding value added tax and adding 13% VAT is Rs. 1,575, What will be the marked price of that kettle? Find the taxable price for valued added tax.
Solution:
Let the marked price excluding VAT = Rs. X
Price after discount = X × (1 - 0.05) = 0.95X
VAT amount = 0.95X × 0.13 = 0.1235X
Price with VAT = 0.95X + 0.1235X = 1.0735X
Given Price with VAT = Rs. 1,575
1.0735X = 1,575
or, X = 1,575 / 1.0735 ≈ Rs. 1,467.43
Taxable price for VAT = Price after discount = 0.95 × 1,467.43 ≈ Rs. 1,394.06
Final marked price excluding VAT = Rs. 1,467.43
Final taxable price for VAT = Rs. 1,394.06
8. A shopkeeper bought an article for Rs. 27,500 excluding value added tax and marked its price Rs. 35,000. When selling the article after allowing 10.5% discount and levying 13% VAT,
(a) What is the price including value added tax?
(b) What is the percentage of profit or loss from this transaction?
(c) If he could sell at the marked price, what percentage of profit would he get?
Solution for (a):
Marked price excluding VAT = Rs. 35,000
Discount = 10.5%
VAT = 13%
Price after discount = Rs. 35,000 × (1 - 0.105) = Rs. 35,000 × 0.895 = Rs. 31,325
VAT amount = Rs. 31,325 × 0.13 = Rs. 4,072.25
Price including VAT = Rs. 31,325 + Rs. 4,072.25 = Rs. 35,397.25
Final price including VAT = Rs. 35,397.25
Solution for (b):
Cost price excluding VAT = Rs. 27,500
Selling price including VAT = Rs. 35,397.25
Profit = Selling price - Cost price = Rs. 35,397.25 - Rs. 27,500 = Rs. 7,897.25
Percentage of profit = (Profit / Cost price) × 100 = (7,897.25 / 27,500) × 100 ≈ 28.72%
Final percentage of profit = 28.72%
Solution for (c):
Marked price excluding VAT = Rs. 35,000
VAT amount = Rs. 35,000 × 0.13 = Rs. 4,550
Selling price including VAT = Rs. 35,000 + Rs. 4,550 = Rs. 39,550
Cost price excluding VAT = Rs. 27,500
VAT on cost price = Rs. 27,500 × 0.13 = Rs. 3,575
Total cost price including VAT = Rs. 27,500 + Rs. 3,575 = Rs. 31,075
Profit = Selling price - Total cost price = Rs. 39,550 - Rs. 31,075 = Rs. 8,475
Percentage of profit = (Profit / Total cost price) × 100 = (8,475 / 31,075) × 100 ≈ 27.27%
Final percentage of profit = 27.27%
9. A shopkeeper bought a watch for Rs. 4,000 excluding value added tax and labelled its price 25% above the cost price. After allowing 12% discount and levying 13% VAT,
(a) How much does the consumer have to pay for value added tax?
(b) If it is sold at a loss of 5%, what will be its price with value added tax?
Solution for (a):
Cost price excluding VAT = Rs. 4,000
Marked price = 4,000 × (1 + 0.25) = Rs. 5,000
Discount = 12%
VAT = 13%
Price after discount = Rs. 5,000 × (1 - 0.12) = Rs. 5,000 × 0.88 = Rs. 4,400
VAT amount = Rs. 4,400 × 0.13 = Rs. 572
Final VAT amount the consumer has to pay = Rs. 572
Solution for (b):
Selling price excluding VAT at a 5% loss = 4,000 × (1 - 0.05) = Rs. 4,000 × 0.95 = Rs. 3,800
VAT amount = Rs. 3,800 × 0.13 = Rs. 494
Price with VAT = Rs. 3,800 + Rs. 494 = Rs. 4,294
Final price with VAT = Rs. 4,294
10. A wholesaler sold a washing machine to a retailer at Rs. 67,000 including 13% value added tax. If the retailer delivered the machine to the consumer’s house with transportation charge Rs. 3,000, local tax Rs. 550 and a profit of Rs. 5,000, how much would the consumer pay for value added tax at the current rate? Find out.
Solution:
Price including VAT from wholesaler to retailer = Rs. 67,000
Let the price excluding VAT = Rs. X
Price including 13% VAT = X × (1 + 0.13) = 1.13X
1.13X = 67,000
or, X = 67,000 / 1.13 ≈ Rs. 59,292.04
Retailer’s cost price excluding VAT = Rs. 59,292.04
Retailer’s selling price excluding VAT = Cost price + Profit + Transportation + Local tax
= 59,292.04 + 5,000 + 3,000 + 550 = Rs. 67,842.04
VAT rate = 13%
VAT amount the consumer pays = Rs. 67,842.04 × 0.13 ≈ Rs. 8,819.47
Final VAT amount the consumer pays = Rs. 8,819.47
11. A wholesaler of watch bought a watch from a dealer at Rs. 12,000 excluding value added tax and sold it to a retailer at Rs. 16,950 including value added tax. If the rate of value added tax is 13% at each level,
(a) How much did the retailer pay for the watch except the value added tax?
(b) How much did the retailer pay for value added tax?
(c) How much profit did the dealer make?
Solution for (a):
Price including VAT from wholesaler to retailer = Rs. 16,950
Let the price excluding VAT = Rs. X
Price including 13% VAT = X × (1 + 0.13) = 1.13X
1.13X = 16,950
or, X = 16,950 / 1.13 ≈ Rs. 15,000
Final amount the retailer paid excluding VAT = Rs. 15,000
Solution for (b):
VAT amount = Price including VAT - Price excluding VAT = 16,950 - 15,000 = Rs. 1,950
Alternatively, VAT amount = Rs. 15,000 × 0.13 = Rs. 1,950
Final VAT amount the retailer paid = Rs. 1,950
Solution for (c):
Note: Assuming the dealer is the wholesaler (as the problem context suggests the wholesaler bought from a supplier and sold to the retailer).
Wholesaler’s cost price excluding VAT = Rs. 12,000
Wholesaler’s selling price excluding VAT = Rs. 15,000
Profit = Selling price excluding VAT - Cost price excluding VAT = 15,000 - 12,000 = Rs. 3,000
Final profit the dealer (wholesaler) made = Rs. 3,000
4. Calculate the actual price of the goods based on the information given in the following table:
(a)
Solution:
Price after discount = 92% of Rs. 2,000
= (92/100) × 2,000
= 0.92 × 2,000
= 1,840
Price with VAT = 113% of 1,840
= (113/100) × 1,840
= 1.13 × 1,840
= 2,079.2
∴ The price that the customer has to pay is Rs. 2,079.2.
(b)
Solution:
Price after discount = 85% of Rs. 7,000
= (85/100) × 7,000
= 0.85 × 7,000
= 5,950
Price with VAT = 113% of 5,950
= (113/100) × 5,950
= 1.13 × 5,950
= 6,723.5
∴ The price that the customer has to pay is Rs. 6,723.5.
(c)
Solution:
Price after discount = 80% of Rs. 27,000
= (80/100) × 27,000
= 0.80 × 27,000
= 21,600
Price with VAT = 113% of 21,600
= (113/100) × 21,600
= 1.13 × 21,600
= 24,408
∴ The price that the customer has to pay is Rs. 24,408.
(d)
Solution:
Price after discount = 90% of Rs. 20,525.30
= (90/100) × 20,525.30
= 0.90 × 20,525.30
= 18,472.77
Price with VAT = 113% of 18,472.77
= (113/100) × 18,472.77
= 1.13 × 18,472.77
= 20,874.2301
∴ The price that the customer has to pay is Rs. 20,874.23.
(e)
Solution:
Price after discount = 92.5% of Rs. 1,81,500
= (92.5/100) × 1,81,500
= 0.925 × 1,81,500
= 1,67,887.5
Price with VAT = 113% of 1,67,887.5
= (113/100) × 1,67,887.5
= 1.13 × 1,67,887.5
= 1,89,712.875
∴ The price that the customer has to pay is Rs. 1,89,712.88.
5. The marked price of a LED television set excluding value added tax is Rs. 37,500. If it is sold after 11% discount and 13% VAT is levied on it, how much will the consumer pay? Find out by calculation.
Solution:
MP excluding VAT = Rs. 37,500
Price after discount = 89% of Rs. 37,500
= (89/100) × 37,500
= 0.89 × 37,500
= 33,375
Price with VAT = 113% of 33,375
= (113/100) × 33,375
= 1.13 × 33,375
= 37,713.75
∴ The price that the consumer has to pay is Rs. 37,713.75.
6. Find the marked price and discount amount based on the given table:
(a)
Solution:
Let the marked price excluding VAT = Rs. 𝑥
Price after discount = 80% of 𝑥
= (80/100) × 𝑥
= 0.8𝑥
Price with VAT = 113% of 0.8𝑥
= (113/100) × 0.8𝑥
= 1.13 × 0.8𝑥
= 0.904𝑥
Given price with VAT = Rs. 4,520
0.904𝑥 = 4,520
or 𝑥 = 4,520 / 0.904
= 5,000
Marked price excluding VAT = Rs. 5,000
Discount amount = 20% of Rs. 5,000
= (20/100) × 5,000
= 0.2 × 5,000
= 1,000
∴ The marked price is Rs. 5,000.00 and the discount amount is Rs. 1,000.
(b)
Solution:
Let the marked price excluding VAT = Rs. 𝑥
Price after discount = 90% of 𝑥
= (90/100) × 𝑥
= 0.9𝑥
Price with VAT = 113% of 0.9𝑥
= (113/100) × 0.9𝑥
= 1.13 × 0.9𝑥
= 1.017𝑥
Given price with VAT = Rs. 15,225
1.017𝑥 = 15,225
or, 𝑥 = 15,225 / 1.017
= 15,000
Marked price excluding VAT = Rs. 15,000
Discount amount = 10% of Rs. 15,000
= (10/100) × 15,000
= 0.1 × 15,000
= 1,500
∴ The marked price is Rs. 15,000.00 and the discount amount is Rs. 1,500.
(c)
Solution:
Let the marked price excluding VAT = Rs. 𝑥
Price after discount = 85% of 𝑥
= (85/100) × 𝑥
= 0.85𝑥
Price with VAT = 113% of 0.85𝑥
= (113/100) × 0.85𝑥
= 1.13 × 0.85𝑥
= 0.9605𝑥
Given price with VAT = Rs. 57,630
0.9605𝑥 = 57,630
or, 𝑥 = 57,630 / 0.9605
= 60,000
Marked price excluding VAT = Rs. 60,000
Discount amount = 15% of Rs. 60,000
= (15/100) × 60,000
= 0.15 × 60,000
= 9,000
∴ The marked price is Rs. 60,000.00 and the discount amount is Rs. 9,000.
(d)
Solution:
Let the marked price excluding VAT = Rs. 𝑥
Price after discount = 75% of 𝑥
= (75/100) × 𝑥
= 0.75𝑥
Price with VAT = 113% of 0.75𝑥
= (113/100) × 0.75𝑥
= 1.13 × 0.75𝑥
= 0.8475𝑥
Given price with VAT = Rs. 2,151.52
0.8475𝑥 = 2,151.52
or, 𝑥 = 2,151.52 / 0.8475
= 2,539.25266372
= 2,539.25
Marked price excluding VAT = Rs. 2,539.25
Discount amount = 25% of Rs. 2,539.25
= (25/100) × 2,539.25
= 0.25 × 2,539.25
= 634.8125
= 634.81
∴ The marked price is Rs. 2,539.25 and the discount amount is Rs. 634.81.
(e)
Solution:
Let the marked price excluding VAT = Rs. 𝑥
Price after discount = 85% of 𝑥
= (85/100) × 𝑥
= 0.85𝑥
Price with VAT = 113% of 0.85𝑥
= (113/100) × 0.85𝑥
= 1.13 × 0.85𝑥
= 0.9605𝑥
Given price with VAT = Rs. 2,40,125
0.9605𝑥 = 2,40,125
or, 𝑥 = 2,40,125 / 0.9605
= 2,50,000
Marked price excluding VAT = Rs. 2,50,000
Discount amount = 15% of Rs. 2,50,000
= (15/100) × 2,50,000
= 0.15 × 2,50,000
= 37,500
∴ The marked price is Rs. 2,50,000and the discount amount is Rs. 37,500.
7. If the price of an electric kettle after allowing 5% discount on the marked price excluding value added tax and adding 13% VAT is Rs. 1,575, what will be the marked price of that kettle? Find the taxable price for value added tax.
Solution:
Let the marked price excluding VAT = Rs. 𝑥
Price after discount = 95% of 𝑥
= (95/100) × 𝑥
= 0.95𝑥
Price with VAT = 113% of 0.95𝑥
= (113/100) × 0.95𝑥
= 1.13 × 0.95𝑥
= 1.0735𝑥
Given price with VAT = Rs. 1,575
1.0735𝑥 = 1,575
or, 𝑥 = 1,575 / 1.0735
= 1,467.16395
= 1,467.16
Marked price excluding VAT = Rs. 1,467.16
Taxable price (price after discount) = 0.95 × 1,467.16
= 1,393.802
= 1,393.80
∴ The marked price is Rs. 1,467.16 and the taxable price for value added tax is Rs. 1,393.80.
8. A shopkeeper bought an article for Rs. 27,500 excluding value added tax and marked its price Rs. 35,000. When selling the article after allowing 10.5% discount and levying 13% VAT,
Solution:
Cost Price (CP) = Rs. 27,500
Discount = 10.5%
VAT = 13%
(a)
Price after discount = 89.5% of Rs. 35,000
= (89.5/100) × 35,000
= 0.895 × 35,000
= 31,325
Price with VAT = 113% of 31,325
= (113/100) × 31,325
= 1.13 × 31,325
= 35,397.25
∴ The price including value added tax is Rs. 35,397.25.
(b)
Selling price (price with VAT) = Rs. 35,397.25
Profit = 35,397.25 - 27,500
= 7,897.25
Profit percentage = (Profit / Cost price) × 100
= (7,897.25 / 27,500) × 100
= 28.71727273
= 28.72
∴ The percentage of profit from this transaction is 28.72%.
(c)
Price with VAT (no discount) = 113% of 35,000
= (113/100) × 35,000
= 1.13 × 35,000
= 39,550
Cost price = Rs. 27,500
Selling price (price with VAT) = Rs. 39,550
Profit = 39,550 - 27,500
= 12,050
Profit percentage = (Profit / Cost price) × 100
= (12,050 / 27,500) × 100
= 43.81818182
= 43.82
∴ The percentage of profit if sold at the marked price is 43.82%.
9. A shopkeeper bought a watch for Rs. 4,000 excluding value added tax and labelled its price 25% above the cost price. After allowing 12% discount and levying 13% VAT,
Solution:
Cost price (CP) = Rs. 4,000
VAT = 13%
(a)
Marked price = 125% of Rs. 4,000
= (125/100) × 4,000
= 1.25 × 4,000
= 5,000
Price after discount = 88% of Rs. 5,000
= (88/100) × 5,000
= 0.88 × 5,000
= 4,400
Price with VAT = 113% of 4,400
= (113/100) × 4,400
= 1.13 × 4,400
= 4,972
VAT amount = 13% of 4,400
= (13/100) × 4,400
= 0.13 × 4,400
= 572
∴ The consumer has to pay Rs. 572 for value added tax.
(b)
Selling price before VAT (at 5% loss) = 95% of Rs. 4,000
= (95/100) × 4,000
= 0.95 × 4,000
= 3,800
Price with VAT = 113% of 3,800
= (113/100) × 3,800
= 1.13 × 3,800
= 4,294
∴ The price with value added tax at a 5% loss is Rs. 4,294.00.
Solution of questions from Excel in Mathematics -Book 9
Taxation
Exercise 2.1
1. (a) The annual income of a sole proprietor of a grocery shop is Rs 10,00,000. If the tax is exempted up to Rs 4,50,000, what is his/her taxable income?
Solution:
Here, taxable income = Rs. 10,00,000 – Rs. 4,50,000
= Rs. 5,50,000
(b) The yearly income of an individual is Rs 4,44,000 with Rs 24,000 remote area allowance. What is his/her taxable income?
Solution:
Here, taxable income = Rs. 4,44,000 – Rs. 24,000
= Rs. 4,20,000
(c) The yearly income of an officer is Rs 4,55,880. If he accumulates Rs 45,588 in provident fund and he pays Rs 25,000 as premium of his life insurance in the year, what is his taxable income?
Solution:
Here, taxable income = Rs. 4,55,880 – Rs. 45,588 – Rs. 25,000
= Rs. 3,85,292
(d) The monthly income of a government servant is Rs 77,280 and he gets the festival expense of one month’s salary. What is his taxable income?
Solution:
Here, taxable income = 12 × Rs. 77,280 + Rs. 77,280
= Rs. 10,04,640
2. (a) The monthly salary of an individual is Rs 25,450. If 1% social security tax is charged up to the annual income of Rs 4,00,000, calculate the income tax paid by the individual.
Solution:
Here, monthly income = Rs. 25,450
∴ Yearly income = 12 × Rs 25,450
= Rs. 3,05,400
Now, income tax need to be paid = 1% of Rs. 3,05,400
= Rs. 3,054
(b) 1% social security tax is charged up to the yearly income of Rs 4,50,000 to a married couple. If the monthly income of a couple is Rs 33,500, how much tax should the couple pay in a year?
Solution:
Here, monthly income = Rs. 33,500
∴ Yearly income = 12 × Rs 33,500
= Rs. 4,02,000
Now, income tax need to be paid = 1% of Rs. 4,02,000
= Rs. 4,020
Creative Section-A
3. Inland Revenue Department (IRD) has fixed the following rates of income tax for Proprietorship firm. Use it to calculate the income taxes.
For an individual
Income slab: Up to Rs. 4,00,000, Tax rate: 0%
Income slab: Rs. 4,00,001 to Rs. 5,00,000, Tax rate: 10%
Income slab: Rs. 5,00,001 to Rs. 7,00,000, Tax rate: 20%
Income slab: Rs. 7,00,001 to Rs. 20,00,000, Tax rate: 30%
For couple
Income slab: Up to Rs. 4,50,000, Tax rate: 0%
Income slab: Rs. 4,50,001 to Rs. 5,50,000, Tax rate: 10%
Income slab: Rs. 5,50,001 to Rs. 7,50,000, Tax rate: 20%
Income slab: Rs. 7,50,001 to Rs. 20,00,000, Tax rate: 30%
(a) Mr. Baral has a stationery shop. His annual income is Rs 6,40,000. If he is unmarried, how much income tax should he pay? Find it.
Solution:
Here,
Annual income of Ram Baral, a stationer = Rs. 6,40,000
= Rs. 4,00,000 + Rs. 1,00,000 + Rs. 1,40,000
Now, income tax = 10% of Rs. 1,00,000 + 20% of Rs. 1,40,000
= Rs. 10,000 + Rs. 28,000
= Rs. 38,000
Hence, he should pay Rs. 38,000 income tax.
(b) Mr. Yadav is still unmarried but he is the proprietor of a furniture factory. He earned Rs. 15,00,000 last year, how much income tax did he pay last year?
Solution:
Here,
Annual income of Mr. Yadav = Rs. 15,00,000
= Rs. 4,00,000 + Rs. 1,00,000 + Rs. 2,00,000 + Rs. 8,00,000
Now, income tax = 10% of Rs. 1,00,000 + 20% of Rs. 2,00,000 + 30% of Rs. 8,00,000
= Rs. 10,000 + Rs. 40,000 + Rs. 2,40,000
= Rs. 2,90,000
Hence, he should pay Rs. 2,90,000 income tax.
(c) Mrs. Adhikari is the proprietor of boutique training centre. If her annual income is Rs. 6,75,000, how much income tax does she pay?
Solution:
Here,
Annual income of Mrs. Adhikari = Rs. 6,75,000
= Rs. 4,00,000 + Rs. 1,00,000 + Rs. 1,75,000
Now, income tax = 10% of Rs. 1,00,000 + 20% of Rs. 1,75,000
= Rs. 10,000 + Rs. 35,000
= Rs. 45,000
Hence, she pays Rs. 45,000 income tax.
(d) Mr. Manandhar is a married person. He has a registered computer repair service centre. He earned Rs. 9,25,000 in this year. How much tax charged on his income?
Solution:
Here,
Annual income = Rs. 9,25,000
= Rs. 4,50,000 + Rs. 1,00,000 + Rs. 2,00,000 + Rs. 1,75,000
Now, income tax = 10% of Rs. 1,00,000 + 20% of Rs. 2,00,000 + 30% of Rs. 1,75,000
= Rs. 10,000 + Rs. 40,000 + Rs. 52,500
= Rs. 1,02,500
Hence, he should pay Rs. 1,02,500 income tax.
4. Study the given income tax rates fixed by IRD and workout the following problems.
Assessed as individual
Particular: First tax slab, Taxable income (Rs): 4,00,000, Tax rate: 1%
Particular: Next, Taxable income (Rs): 1,00,000 (4,00,001 to 5,00,000), Tax rate: 10%
Particular: Next, Taxable income (Rs): 2,00,000 (5,00,001 to 7,00,000), Tax rate: 20%
Particular: Next, Taxable income (Rs): 13,00,000 (7,00,001 to 20,00,000), Tax rate: 30%
Particular: Balance exceeding, Taxable income (Rs): 20,00,000, Tax rate: 36%
Assessed as couple
Particular: First tax slab, Taxable income (Rs): 4,50,000, Tax rate: 1%
Particular: Next, Taxable income (Rs): 1,00,000 (4,50,001 to 5,50,000), Tax rate: 10%
Particular: Next, Taxable income (Rs): 2,00,000 (5,50,001 to 7,50,000), Tax rate: 20%
Particular: Next, Taxable income (Rs): 12,50,000 (7,50,001 to 20,00,000), Tax rate: 30%
Particular: Balance exceeding, Taxable income (Rs): 20,00,000, Tax rate: 36%
(a) The monthly income of an unmarried civil officer is Rs 37,990 and one month’s salary is provided as Dashain expense. How much income tax should he/she pay in a year?
Solution:
Here, yearly income with Dashain expense = 12 × Rs. 37,990 + Rs. 37,990
= Rs. 4,93,870
= Rs. 4,00,000 + Rs. 93,870
Now, the total income tax = 1% of Rs. 4,00,000 + 10% of Rs. 93,870
= Rs. 4,000 + Rs. 9,387
= Rs 13,387
Hence, he/she should pay the income tax of Rs. 13,387 in a year.
(b) The monthly salary of a married couple is Rs 40,500 plus a festival expense of Rs 30,000. Calculate the income tax paid by the couple in a year.
Solution:
Here, yearly income with festival expense = 12 × Rs. 40,500 + Rs. 30,000
= Rs. 5,16,000
= Rs. 4,50,000 + Rs. 66,000
Now, the total income tax = 1% of Rs. 4,50,000 + 10% of Rs. 66,000
= Rs. 4,500 + Rs. 6,600
= Rs 11,100
Hence, the couple should pay the income tax of Rs. 11,100 in a year.
(c) Mrs. Gurung is a bank Manager in a development bank. Her monthly is Rs 50,000. If her annual income is equivalent to her 15 month’s salary, find her income tax in a year.
Solution:
Here, annual income of Mrs. Gurung = 15 × Rs. 50,000
= Rs. 7,50,000
= Rs. 4,50,000 + Rs. 1,00,000 + Rs. 2,00,000
Now,
Total income tax = 1% of Rs. 4,50,000 + 10% of Rs. 1,00,000 + 20% of Rs. 2,00,000
= Rs. 4,500 + Rs. 10,000 + Rs. 40,000
= Rs. 54,500
Hence, she pays Rs. 54,500 income tax.
(d) The monthly salary of an individual employee of an INGO is Rs 1,80,000. Calculate the income tax paid by the individual in a year.
Solution:
Here, the annual income of an individual employee = 12 × Rs. 1,80,000
= Rs. 21,60,000
= Rs. 4,00,000 + Rs. 1,00,000 + Rs. 2,00,000 + Rs. 13,00,000 + Rs. 1,60,000
Now,
Total income tax = 1% of Rs. 4,00,000 + 10% of Rs. 1,00,000 + 20% of Rs. 2,00,000 + 30% of Rs. 13,00,000 + 36% of Rs. 1,60,000
= Rs. 4,000 + Rs. 10,000 + Rs. 40,000 + Rs. 3,90,000 + Rs. 57,600
= Rs. 5,01,600
Hence, he/she should pay the income tax of Rs. 5,01,600 in a year.
5. (a) Mrs. Thakuri deposited Rs. 2,00,000 in her fixed account at a bank for 3 years. The bank pays her the simple interest at the rate of 10% p.a. How much net interest would she get if 5% of interest is charged as income tax?
Solution:
Here, principal (P) = Rs. 2,00,000, time (T) = 3 years and rate (R)=10% p.a.
Now, simple interest (I) = PTR / 100 = Rs 200000 × 3 × 10 / 100 = Rs. 60,000
Also, rate of tax = 5%
∴Tax amount = 5% of Rs. 60,000 = Rs. 3,000
Net interest = Rs. 60,000 – Rs. 3,000 = Rs. 57,000
Hence, she would receive the net interest of Rs. 57,000.
(b) Mr. Thapa deposits Rs 50,000 in a bank at the rate of 8% p.a. How much net interest will he get after 4 years if he has to pay 5% of his interest as income tax?
Solution:
Here, principal (P) = Rs. 50,000, time (T) = 4 years and rate (R) = 8% p.a.
Now, simple interest (I) = PTR / 100 = Rs 50000 × 4 × 8 / 100 = Rs. 16,000
Also, rate of tax = 5%
∴Tax amount = 5% of Rs 16,000 = Rs. 800
Net interest = Rs 16,000 – Rs. 800 = Rs. 15,200
Hence, she would receive the net interest of Rs. 15,200.
(d) In the beginning of BS 2076, Dolma deposited Rs 1,20,000 in her account at the rate of 9% p.a. If she paid 5% of her interest as income tax, how much total did she receive in the beginning of BS 2079?
Solution:
Here, principal (P) = Rs. 1,20,000, time (T) = 3 years and rate (R) = 9% p.a.
Now, simple interest (I) = PTR / 100 = Rs 120000 × 3 × 9 / 100 = Rs. 32,400
Also, rate of tax = 5%
∴Tax amount = 5% of Rs 32,400 = Rs. 1,620
Net interest = Rs. 32,400 – Rs. 1,620 = Rs. 30,780
Again, net amount = Rs. 1,20,000 + Rs. 30,780 = Rs. 1,50,780
Hence, she received the total amount of Rs. 1,50,780.
(e) On the occasion of daughter’s 14th birthday, Dharmendra deposits Rs 25,000 in his daughter’s bank account at the rate of 6% p.a. If 5% of the interest is charged as income tax, how much amount will she withdraw on her 16th birthday?
Solution:
Here, principal (P) = Rs. 25,000, time (T) = 2 years and rate (R) = 6% p.a.
Now, simple interest (I) = PTR / 100 = Rs 25000 × 2 × 6 / 100 = Rs. 3,000
Also, rate of tax = 5%
∴Tax amount = 5% of Rs 3,000 = Rs. 150
Net interest = Rs. 3,000 – Rs. 150 = Rs. 2,850
Again, net amount = Rs. 25,000 + Rs. 2,850 = Rs. 27,850
Hence, she received the total amount of Rs. 27,850.
6. (a) Mrs. Majhi deposited a certain amount in her bank account at the rate of 6.5% p.a. If she paid 5% of her interest as income tax and received Rs 4940 net interest after 4 years, how much money was deposited by her?
Solution:
Let, the required sum (P) be Rs X.
Time (T) = 4 years and rate (R) = 6.5% p.a.
Now,
Simple interest (I) = PTR / 100 = X × 4 × 6.5 / 100 = Rs 0.26X
Also, rate of tax = 5% ∴Tax amount = 5% of Rs 0.26X = Rs 0.013X
According to question, net interest = Rs 4,940
or, Total interest – tax = Rs 4,940
or, 0.26X – 0.013X = 4,940
or, 0.247X = 4,940
∴ X = 20,000
Hence, the required sum is Rs 20,000.
(b) Madan Bahadur deposited a sum of money at his bank account at the rate of 10% p.a. After 5 years, he received Rs 1900, the net interest when 5% of the total interest was charged as income tax. Find, how much sum was deposited by him?
Solution:
Let, the required sum (P) be Rs X.
Time (T) = 5 years and rate (R) = 10% p.a.
Now, simple interest (I) = PTR / 100 = X × 5 × 10 / 100 = Rs 0.5X
Also, rate of tax = 5% ∴Tax amount = 5% of Rs 0.5X = Rs 0.025X
According to question, net interest = Rs 1,900
or, Total interest – tax = Rs 1,900
or, 0.5X – 0.025X = 1,900
or, 0.475X = 1,900
∴ X = 4,000
Hence, the required sum is Rs 4,000.
7. (a) Mr. Khatiwada is an unmarried secondary level mathematics teacher in a community school. His monthly salary is Rs 39,990 with Rs 2,000 allowance and gets one month’s basic salary as festival expense. If 10% and next 13% of his basic salary is deposited in his provident fund and civil investment trust (CIT) respectively, how much income tax should he pay in this year?
Solution:
Here, monthly basic salary of Mr. Khatiwada = Rs 39,990 – Rs 2,000 = Rs 37,990
Festival expense = Basic salary of one month = Rs 37,990
Monthly provident fund = 10% of Rs 37,990 = Rs 3,799
Monthly deposit at CIT = 13% of Rs 37,990 = Rs 4,938.70
After deducting provident fund and CIT,
his monthly income = Rs 39,990 – Rs 3,799 – Rs 4,938.70 = Rs 31,252.30
∴Taxable income of the year with festival expense = 12 × Rs 31,252.30 + Rs 37,990
= Rs 4,13,017.60
= Rs 4,00,000 + Rs 13,017.60
Now, the social security tax for the first Rs 4,00,000 = 1% of Rs 4,00,000 = Rs 4,000
Again, the income tax for Rs Rs 13,017.60 = 10% of Rs 13,017.60
= Rs 1301.76
The total income tax paid by Mr. Khatiwada = Rs 4000 + Rs 1301.76 = Rs 5301.76
Hence, Mr. Khatiwada should pay the income tax of Rs 5,301.76 in a year.
(b) Mrs. Anjali Subba is a medical doctor in a government hospital. Her monthly salary is Rs 50,000 including Rs 2,000 allowance and she receives festival expense equivalent to her one month’s basic salary. 10% of her basic salary is deducted as provident fund and she pays Rs 48,500 annually as the premium of her insurance. How much income tax should she pay in a year?
Solution:
Here, monthly basic salary of Mrs. Anjali Subba = Rs 50,000 – Rs 2,000 = Rs 48,000
Festival expense = Basic salary of one month = Rs. 48,000
Monthly provident fund = 10% of Rs. 48,000 = Rs 4,800
After deducting provident fund, her monthly income = Rs 50,000 – Rs 4,800
= Rs. 45,200
Premium of insurance = Rs. 48,500
After deducting premium of insurance, taxable income of the year with festival expense
= 12 × Rs. 45,200 + Rs. 48,000 – Rs. 48,500
= Rs. 5,41,900
= Rs. 4,50,000 + Rs. 91,900
Now,
Total income tax = 1% of Rs. 4,50,000 + 10% of Rs.91,900
= Rs. 4,500 + Rs. 9,190
= Rs. 13,690
Hence, she should pay Rs 13,690 as income tax.
(c) After deducting 10% provident fund, a married person draws Rs 40,500 salary per month and one month’s salary as festival expense, the person pays Rs 14,500 annually as the premium of his/her insurance. Calculate the annual income tax paid by the person.
Solution:
Here, after deducting 10% provident fund, the monthly salary = Rs. 40,500
Let, the monthly salary of a married person be Rs. x.
Then, x – 10% of x = Rs 40,500
or, x – 10 / 100 x = Rs 40,500
or, 9x / 10 = Rs 40,500
or, x = Rs 45,000
Hence, his/her monthly salary is Rs. 45,000
Also, festival expense = Rs. 45,000
After deducting provident fund, the annual income with festival expense
= 12 × Rs. 40,500 + Rs. 45,000
= Rs. 5,31,000
Premium of his/her insurance = Rs. 14,500
∴After deducting premium of insurance, the taxable income
= Rs. 5,31,000 – Rs. 14,500
= Rs. 5,16,500
= Rs. 4,50,000 + Rs. 66,500
Again,
Total income tax = 1% of Rs. 4,50,000 + 10% of Rs. 66,500
= Rs. 4,500 + Rs. 6,650
= Rs. 11,150
Hence, the person pays Rs. 11,150 income tax.
(d) Mr. Sayad Sharma an unmarried employee of a UN project draws monthly salary of Rs 51,000 after deducting 10% salary in his provident fund and 5% in citizen investment trust. He also receives one month’s salary as the festival expense. He pays Rs 22,000 annually as the premium of his life insurance. How much income tax does he pay in a year?
Solution:
Here,
After deducting 10% provident fund and 5% CIT, the monthly salary = Rs. 51,000
Let, the monthly salary be Rs. x.
Then, x – 10% of x – 5% of x = Rs 40,500
or, x – 10 / 100 x – 5 / 100 x = Rs 40,500
or, 17x / 20 = Rs 40,500
or, x = Rs 60,000
Hence, his monthly salary is Rs. 60,000
Also, festival expense = Rs. 60,000
After deducting provident fund and CIT, the annual income with festival expense
= 12 × Rs. 51,000 + Rs. 60,000
= Rs. 6,72,000
Premium of his/her insurance = Rs. 22,000
∴After deducting premium of insurance, the taxable income
= Rs. 6,72,000 – Rs. 22,000
= Rs. 6,50,000
= Rs. 4,00,000 + Rs. 1,00,000 + Rs. 1,50,000
Again,
Total income tax = 1% of Rs. 4,00,000 + 10% of Rs. 1,00,000 + 20% of Rs. 1,50,000
= Rs. 4,000 + Rs. 10,000 + Rs. 30,000
= Rs. 44,000
Hence, the he pays Rs. 44,000 income tax.
8. (a) Mr. and Mrs. Pandey are a married couple. Mr. Pandey is the mayor of a municipality and his monthly salary is Rs 48,000 with Rs 2,000 allowance. Mrs. Pandey is the sole proprietor of a beauty-parlor and her annual income is Rs 6,20,000. Who pays more income tax and by how much?
Solution:
Here,
For Mr. Pandey, monthly income with allowance = Rs. 48,000
∴His annual income = 12 × Rs. 48,000
= Rs. 5,76,000
= Rs. 4,50,000 + Rs. 1,00,000 + Rs. 26,000
Now, income tax = 1% of Rs. 4,50,000 + 10% of Rs. 1,00,000 + 20% of Rs. 26,000
= Rs. 4,500 + Rs. 10,000 + Rs. 5,200
= Rs. 19,700
For Mrs. Pandey, yearly income = Rs. 6,20,000
= Rs. 4,50,000 + Rs. 1,00,000 + Rs. 70,000
Now, income tax = 0% of Rs. 4,50,000 + 10% of Rs. 1,00,000 + 20% of Rs. 70,000
= Rs. 10,000 + Rs. 14,000
= Rs. 24,000
Difference due to their income tax = Rs. 24,000 – Rs. 19,700 = Rs. 4,300
Hence, Mrs. Pandey pays Rs. 4,300 more tax than Mr. Pandey.
(b) The monthly salary of Ms. Chhiring, an unmarried servant in a bank, is Rs 30,000 and her annual income is equivalent to her salary of 15 months. Similarly, the monthly salary of Sumesh, a married civil servant is Rs 40,000 and his annual income is equivalent to his 13 month’s salary including festival expense. Who pays more income tax and by how much?
Solution:
Here,
For Ms. Chhiring, monthly income = Rs. 30,000
∴His annual income = 15 × Rs. 30,000 = Rs. 4,50,000
= Rs. 4,00,000 + Rs. 50,000
Now, income tax = 1% of Rs. 4,00,000 + 10% of Rs. 50,000
= Rs. 4,000 + Rs. 5,000
= Rs. 9,000
For Sumesh, yearly income = 13 × Rs. 40,000 = Rs. 5,20,000
= Rs. 4,50,000 + Rs. 70,000
∴Income tax = 1% of Rs. 4,50,000 + 10% of Rs. 70,000
= Rs. 4,500 + Rs. 7,000
= Rs. 11,500
Difference due to their income tax = Rs. 11,500 – Rs. 9,000 = Rs. 2,500
Hence, Sumesh pays Rs. 2,500 more tax Ms. Chhiring.
VAT
EXERCISE 2.2
General section
1. (a) If R% be the rate of VAT and Rs x be the selling price, write the formula to find amount of VAT.
Solution:
Here, VAT amount = VAT% of S.P. = R% of Rs. x
(b) If Rs. x be the selling price and Rs. y be the amount of VAT, write the formula to find VAT percent.
Solution:
Here, VAT percent = VAT amount / S.P. × 100% = y / x × 100%
(c) If Rs. P be the selling price and R% be the VAT rate, write the formula to find selling price with VAT.
Solution:
Here, S.P. with VAT = S.P. + VAT% of S.P. = Rs. P + R% of Rs. P
(d) If marked price (M.P.) = Rs x, discount = Rs y and VAT = Rs z, what is the selling price including VAT?
Solution:
Here, S.P. = M.P. – Discount = Rs. x – Rs. y
∴S.P. with VAT = S.P. + VAT = Rs. (x – y) + Rs. z = Rs. (x – y + z)
2. (a) Find the selling price with VAT from the table given below.
| S.N. | Particulars | S.P. without VAT | VAT rate | VAT amount |
|---|---|---|---|---|
| (i) | Mobile set | Rs. 22,000 | 13% | ........... |
| (ii) | Camera | Rs. 35,000 | 13% | ........... |
| (iii) | Television | Rs. 40,000 | 10% | ........... |
Solution:
Here,
(i) For mobile set, S.P. with VAT = VAT% of S.P. = 13% of Rs. 22,000 = Rs. 2,860
(ii) For camera, S.P. with VAT = VAT% of S.P. = 13% of Rs. 35,000 = Rs. 4,550
(iii) For television, S.P. with VAT = VAT% of S.P. = 10% of Rs. 40,000 = Rs. 4,000
(b) Find the selling price without VAT from the table given below.
| S.N. | Particulars | VAT amount | VAT rate | S.P. without VAT |
|---|---|---|---|---|
| (i) | Radio | Rs. 585 | 13% | ........... |
| (ii) | Bicycle | Rs. 975 | 13% | ........... |
| (iii) | Laptop | Rs. 9,900 | 15% | ........... |
Solution:
Here,
(i) Let, S.P. without VAT of a radio be Rs. x
Now, VAT amount = VAT% of S.P.
or, Rs. 585 = 13% of x
or, 0.13x = Rs. 585
or, x = Rs. 4,500
Hence, the S.P. without VAT of the radio is Rs. 4,500.
(ii) Let, S.P. without VAT of a bicycle be Rs. x
Now, VAT amount = VAT% of S.P.
or, Rs. 975 = 13% of x
or, 0.13x = Rs. 975
or, x = Rs. 7,500
Hence, the S.P. without VAT of the bicycle is Rs. 7,500.
(iii) Let, S.P. without VAT of a laptop be Rs. x
Now, VAT amount = VAT% of S.P.
or, Rs. 9,900 = 15% of x
or, 0.15x = Rs. 9,900
or, x = Rs. 66,000
Hence, the S.P. without VAT of the laptop is Rs. 66,000.
3. (a) The selling price of a watch is Rs 3,000. What will be the VAT amount on it at the rate of 13%?
Solution:
Here, S.P. of a watch = Rs. 3,000
Now, VAT amount = VAT% of S.P.
= 13% of Rs. 3,000
= Rs. 390
Hence, the required VAT amount is Rs. 390
(b) Calculate the VAT amount on a tablet costing Rs 15,000 at the rate of 13%.
Solution:
Here, S.P. of a tablet = Rs. 15,000
Now, VAT amount = VAT% of S.P.
= 13% of Rs. 15,000
= Rs. 1,950
Hence, the required VAT amount is Rs. 1,950.
(c) The catalogue price of a refrigerator is Rs 28,500. How much amount of VAT is levied on it at the rate of 13%?
Solution:
Here, M.P. of a refrigerator = S.P. of a refrigerator = Rs. 28,500
Now, VAT amount = VAT% of S.P.
= 13% of Rs. 28,500
= Rs. 3,705
Hence, the required VAT amount is Rs. 3,705.
4. (a) The cost of a fan is Rs 1,600. If Mrs. Khadka purchased it with 13% VAT, how much did she pay for it?
Solution:
Here, S.P. of a fan = Rs. 1,600
Now, S.P. with VAT = S.P. + VAT% of S.P.
= Rs. 1,600 + 13% of Rs. 1,600
= Rs. 1,808
Hence, Mrs. Khadka paid Rs. 1,808 for the fan.
(b) The selling price of a radio is Rs 4,000. How much should a customer pay for it with 13% value added tax?
Solution:
Here, S.P. of a radio = Rs. 4,000
Now, S.P. with VAT = S.P. + VAT% of S.P.
= Rs. 4,000 + 13% of Rs. 4,000
= Rs. 4,520
Hence, the customer should pay Rs. 4,520 for the radio.
(c) The marked price of a pen-drive is Rs 700 and the shopkeeper levies 13% VAT on it. If you give a 1,000 rupee note, what change will the shopkeeper return to you?
Solution:
Here, M.P. of a pen-drive = S.P. of a pen-drive = Rs. 700
Now, S.P. with VAT = S.P. + VAT% of S.P.
= Rs. 700 + 13% of Rs. 700
= Rs. 791
Again, change = Rs. 1,000 – Rs. 791 = Rs. 209
Hence, the shopkeeper will return Rs. 209
(d) A family had dinner in a restaurant. If the cost of the dinner was Rs 2,100, how much did the family pay with 10% service charge and 13% VAT?
Solution:
Here, cost of dinner = Rs. 2,100
Service charge = 10%
VAT rate = 13%
Now, the cost of dinner with service charge = Rs. 2,100 + 10% of Rs. 2,100
= Rs. 2,310
Again, the cost of the dinner with VAT = Rs. 2,310 + 13% of Rs. 2,310
= Rs. 2,610.30
Hence, the family should pay Rs. 2,610.30 for the dinner.
5. (a) The cost of a rice cooker with 13% VAT is Rs 4,068. Find its cost without VAT.
Solution:
Here, S.P. of a cooker with 13% VAT = Rs. 4,068
Let, S.P. without VAT = Rs. x
Now, S.P. with VAT = S.P. + VAT% of S.P.
or, Rs. 4,068 = x + 13% of x
or, Rs. 4,068 = 1.13 x
or, x = Rs. 3,600
Hence, the cost of the cooker without VAT is Rs. 3,600
(b) Mr. Magar purchased a mobile set for Rs 11,155 with 15% VAT inclusive. Find the cost of the mobile without VAT and also calculate the VAT amount.
Solution:
Here, S.P. of a mobile set with 15% VAT = Rs. 11,155
Let, S.P. without VAT = Rs. x
Now, S.P. with VAT = S.P. + VAT% of S.P.
or, Rs. 11,155 = x + 15% of x
or, Rs. 11,155 = 1.15 x
or, x = Rs. 9,700
Hence, the cost of the mobile without VAT is Rs. 9,700
Again, VAT amount = 15% of Rs. 9,700 = Rs. 1,455
(c) Mrs. Maharjan bought a refrigerator for Rs 26,442 with 13% VAT. How much did she pay for the VAT?
Solution:
Here, S.P. of a refrigerator with 13% VAT = Rs. 26,442
Let, S.P. without VAT = Rs. x
Now, S.P. with VAT = S.P. + VAT% of S.P.
or, Rs. 26,442 = x + 13% of x
or, Rs. 26,442 = 1.13 x
or, x = Rs. 23,400
Again, VAT amount = 13% of Rs. 23,400 = Rs. 3,042
Hence, she has to pay Rs. 3,042 for VAT.
6. (a) If the cost of a watch with VAT is Rs 5,130 and without VAT is Rs 4,500, find the VAT rate.
Solution:
Here, S.P. of a watch with VAT = Rs. 5,130
S.P. without VAT = Rs. 4,500
Now, VAT amount = S.P. with VAT – S.P. without VAT
= Rs. 5,130 – Rs. 4,500
= Rs. 630
Again, rate of VAT = VAT amount / S.P. without VAT × 100%
= Rs. 630 / Rs. 4500 × 100%
= 14%
Hence, the required VAT rate is 14%.
(b) Malvika purchased a fancy bag for Rs 7,119 with VAT. If its cost without VAT is Rs 6,300, calculate the rate of VAT.
Solution:
Here, S.P. of a fancy bag with VAT = Rs. 7,119
S.P. without VAT = Rs. 6,300
Now, VAT amount = S.P. with VAT – S.P. without VAT
= Rs. 7,119 – Rs. 6,300
= Rs. 819
Again, rate of VAT = VAT amount / S.P. without VAT × 100%
= Rs. 819 / Rs. 6300 × 100%
= 13%
Hence, the required VAT rate is 13%.
(c) If the cost of a computer with VAT is Rs 67,800 and without VAT is Rs 60,000, find the VAT rate.
Solution:
Here, S.P. of a computer with VAT = Rs. 67,800
S.P. without VAT = Rs. 60,000
Now, VAT amount = S.P. with VAT – S.P. without VAT
= Rs. 67,800 – Rs. 60,000
= Rs. 7,800
Again, rate of VAT = VAT amount / S.P. without VAT × 100%
= Rs. 7800 / Rs. 60000 × 100%
= 13%
Hence, the required VAT rate is 13%.
Creative Section-A
7. (a) Find the selling price of the following appliances with VAT.
(i) Cycle
M.P. = Rs 25,000
Discount rate = 10%
VAT rate = 13%
(ii) Refrigerator
M.P. = Rs 40,000
Discount rate = 15%
VAT rate = 13%
(iii) Laptop
M.P. = Rs 85,000
Discount rate = 14%
VAT rate = 13%
(iv) Camera
M.P. = Rs 1,20,000
Discount rate = 14%
VAT rate = 13%
Solution:
(i) Here, M.P. of a cycle = Rs. 25,000
Discount rate = 10%
VAT rate = 13%
Now, S.P. after discount = M.P. – Discount % of M.P.
= Rs. 25,000 – 10% of Rs. 25,000
= Rs. 22,500
Again, S.P. with VAT = S.P. + VAT% of S.P.
= Rs. 22,500 + 13% of Rs. 22,500
= Rs. 25,425
Hence, the selling price of the cycle with VAT is Rs. 25,425
(ii) Here, M.P. of a refrigerator = Rs. 40,000
Discount rate = 15%
VAT rate = 13%
Now, S.P. after discount = M.P. – Discount % of M.P.
= Rs. 40,000 – 15% of Rs. 40,000
= Rs. 34,000
Again, S.P. with VAT = S.P. + VAT% of S.P.
= Rs. 34,000 + 13% of Rs. 34,000
= Rs. 38,420
Hence, the selling price of the refrigerator with VAT is 38,420.
(iii) Here, M.P. of a laptop = Rs. 85,000
Discount rate = 14%
VAT rate = 13%
Now, S.P. after discount = M.P. – Discount % of M.P.
= Rs. 85,000 – 14% of Rs. 85,000
= Rs. 73,100
Again, S.P. with VAT = S.P. + VAT% of S.P.
= Rs. 73,100 + 13% of Rs. 73,100
= Rs. 82,603
Hence, the selling price of the laptop with VAT is Rs. 82,603.
(iv) Here, M.P. of a camera = Rs. 1,20,000
Discount rate = 14%
VAT rate = 13%
Now, S.P. after discount = M.P. – Discount % of M.P.
= Rs. 1,20,000 – 14% of Rs. 1,20,000
= Rs. 1,03,200
Again, S.P. with VAT = S.P. + VAT% of S.P.
= Rs. 1,03,200 + 13% of Rs. 1,03,200
= Rs. 1,16,616
Hence, the selling price of the camera with VAT is Rs. 1,16,616
7. (b) The marked price of a bike helmet is Rs 3,000 and 10% discount is allowed on it. Find its cost with 13% VAT.
Solution:
Here, M.P. of a bike helmet = Rs. 3,000
Discount rate = 10%
VAT rate = 13%
Now, S.P. after discount = M.P. – Discount % of M.P.
= Rs. 3,000 – 10% of Rs. 3,000
= Rs. 2,700
Again, S.P. with VAT = S.P. + VAT% of S.P.
= Rs. 2,700 + 13% of Rs. 2,700
= Rs. 3,051
Hence, the selling price of the helmet with VAT is Rs. 3,051.
(c) The price of a blanket is marked as Rs 5,500. If the shopkeeper allows 20% discount and adds 13% VAT, how much does a customer pay for the blanket?
Solution:
Here, M.P. of a blanket = Rs. 5,500
Discount rate = 20%
VAT rate = 13%
Now, S.P. after discount = M.P. – Discount % of M.P.
= Rs. 5,500 – 20% of Rs. 5,500
= Rs. 4,400
Again, S.P. with VAT = S.P. + VAT% of S.P.
= Rs. 4,400 + 13% of Rs. 4,400
= Rs. 4,972
Hence, the customer should pay Rs. 4,972 for the blanket.
(e) A trader bought a motorbike for Rs 2,40,000 and fixed its price 20% above the cost price. Then, he allowed 10% discount and sold to a customer. How much did the customer pay for it with 13% VAT?
Solution:
Here, C.P. of a motorbike = Rs. 2,40,000
∴ M.P. of a bike = Rs. 2,40,000 + 20% of Rs. 2,40,000
= Rs. 2,88,000
Discount rate = 10%
VAT rate = 13%
Now, S.P. after discount = M.P. – Discount % of M.P.
= Rs. 2,88,000 – 10% of Rs. 2,88,000
= Rs. 2,59,200
Again, S.P. with VAT = S.P. + VAT% of S.P.
= Rs. 2,59,200 + 13% of Rs. 2,59,200
= Rs. 2,92,896
Hence, the customer should pay Rs. 2,92,896 for the bike.
8. (a) A shopkeeper bought a television for Rs 16,000 and sold at a profit of 20% to a customer with 13% VAT. How much did the customer pay for the television?
Solution:
Here, C.P. of a television = Rs. 16,000
Profit percent = 20%
Now, S.P. of a television = C.P. + profit% of C.P.
= Rs. 16,000 + 20% of Rs. 16,000
= Rs. 19,200
VAT rate = 13%
Again, S.P. with VAT = S.P. + VAT% of S.P.
= Rs. 19,200 + 13% of Rs. 19,200
= Rs. 21,696
Hence, the customer should pay Rs. 21,696 for the television.
(b) Mrs. Lama marked the price of cosmetic item 25% above its cost price. If the cost price of the cosmetic item was Rs 4,400, at what price did she sell it with 13% VAT?
Solution:
Here, C.P. of cosmetic item = Rs. 4,400
Now, M.P. of the cosmetic item = Rs. 4,400 + 25% of Rs. 4,400
= Rs. 5,500
VAT rate = 13%
Again, S.P. with VAT = S.P. + VAT% of S.P.
= Rs. 5,500 + 13% of Rs. 5,500
= Rs. 6,215
Hence, the customer should pay Rs. 6,215 for the cosmetic item.
(c) Mr. Sharma bought a computer for Rs 50,000 and fixed its price 15% above the cost price. How much did the customer pay for the computer including 13% value added tax?
Solution:
Here, C.P. of computer = Rs. 50,000
Now, M.P. of the computer = S.P. of the computer
= Rs. 50,000 + 15% of Rs. 50,000
= Rs. 57,500
VAT rate = 13%
Again, S.P. with VAT = S.P. + VAT% of S.P.
= Rs. 57,500 + 13% of Rs. 57,500
= Rs. 64,975
Hence, the customer should pay Rs. 64,975 for the computer.
9. (a) Mrs. Kandel went to a restaurant with her family. They had three plates of Mo:Mo at Rs 120 per plate, one plate chicken chilly at Rs 220 per plate, and three bottles of cold drink at Rs 40 per bottle. If 13% VAT is levied on the bill after adding 10% service charge on the bill, how much did she pay to clear the bill?
Solution:
Here, original bill = 3 × Rs. 120 + Rs. 220 + 3 × Rs. 40 = Rs. 700
Service charge = 10%
VAT rate = 13%
Now, the cost of the dinner with service charge = S.P. + 10% of S.P.
= Rs. 700 + 10% of Rs. 700
= Rs. 770
Again,
The cost of the dinner with service charge and VAT = Rs. 770 + 13% of Rs. 770
= Rs 870.10
Therefore, the family should paid Rs. 870.10
(b) A group of three friends had two plates of chicken chilly, two plates of French fry, two Mo:Mo and a few glasses of fresh juice in a restaurant. If the cost of these items amounts to Rs 900, how much should they pay with 10% service charge and 13% VAT to clear the bill?
Solution:
Here, original bill = Rs. 900
Service charge = 10%
VAT rate = 13%
Now, the cost of the dinner with service charge = S.P. + 10% of S.P.
= Rs. 900 + 10% of Rs. 900
= Rs. 990
Again,
The cost of the dinner with service charge and VAT = Rs. 990 + 13% of Rs. 990
= Rs. 1,118.70
Therefore, they should paid Rs. 1,118.70
10. (a) A retailer allows 15% discount on the marked price of an electric fan. If a customer pays Rs 2,244 with 10% VAT, find the marked price of the fan.
Solution:
Here, rate of discount = 15%
VAT rate = 10%
S.P. of an electric fan with VAT = Rs. 2,244
Let, M.P. of the electric fan be Rs. x
Now, S.P. after discount = M.P. – Discount % of M.P.
= Rs. x – 15% of Rs. x
= Rs. 0.85x
Again, S.P. with VAT = S.P. + VAT% of S.P.
or, Rs. 2,244 = 0.85x + 10% of 0.85x
or, 2,244 = 0.935x
or, x = 2400
Hence, the marked price of the fan is Rs. 2,400.
10. (b) Allowing 16% discount on the marked price of a television and levying 13% VAT, a buyer has to pay Rs 18,984 to buy it. Find the marked price of the television.
Solution:
Here, rate of discount = 16%
VAT rate = 13%
S.P. of television with VAT = Rs. 18,984
Let, M.P. of the television be Rs. x
Now, S.P. after discount = M.P. – Discount % of M.P.
= Rs. x – 16% of Rs. x
= Rs. 0.84x
Again, S.P. with VAT = S.P. + VAT% of S.P.
or, Rs. 18,984 = 0.84x + 13% of 0.84x
or, 18,984 = 0.9492x
or, x = 20000
Hence, the marked price of the television is Rs. 20,000.
(c) Allowing 15% discount and including same percentage of VAT, the laptop was sold at Rs 64,515. Find the marked price of the laptop.
Solution:
Here, rate of discount = 15%
VAT rate = 15%
S.P. of a laptop with VAT = Rs. 64,515
Let, M.P. of the laptop be Rs. x
Now, S.P. after discount = M.P. – Discount % of M.P.
= Rs. x – 15% of Rs. x
= Rs. 0.85x
Again, S.P. with VAT = S.P. + VAT% of S.P.
or, Rs. 64,515 = 0.85x + 15% of 0.85x
or, 64,515 = 0.9775x
or, x = 66,000
Hence, the marked price of the laptop is Rs. 66,000.
11. (a) After allowing 5% discount on the marked price of a gift item, 10% VAT is charged on it. Now, its price became Rs 1,672. How much amount was given in the discount?
Solution:
Here, rate of discount = 5%
VAT rate = 10%
S.P. of a gift item with VAT = Rs. 1,672
Let, M.P. of the gift item be Rs. x
Now, S.P. after discount = M.P. – Discount % of M.P.
= Rs. x – 5% of Rs. x
= Rs. 0.95x
Also, S.P. with VAT = S.P. + VAT% of S.P.
or, Rs. 1672 = 0.95x + 10% of 0.95x
or, 1672 = 1.045x
or, x = 1600
Hence, the marked price of the gift item is Rs. 1,600.
Again, discount amount = 5% of Rs. 1,600 = Rs.80.
11. (b) Mrs. Gurung sold her goods for Rs 16,950 allowing 25% discount and then levied on 13% VAT, what was the amount of discount?
Solution:
Here, rate of discount = 25%
VAT rate = 13%
S.P. of goods with VAT = Rs. 16,950
Let, M.P. of the gift item be Rs. x
Now, S.P. after discount = M.P. – Discount % of M.P.
= Rs. x – 25% of Rs. x
= Rs. 0.75x
Also, S.P. with VAT = S.P. + VAT% of S.P.
or, Rs. 16,950 = 0.75x + 13% of 0.75x
or, 16,950 = 0.8475x
or, x = 20,000
Hence, the marked price of the goods is Rs. 20,000.
Again, discount amount = 25% of Rs. 20,000 = Rs.5,000.
11. (c) A tourist paid Rs 5,610 for a carved window made up of wood with a discount of 15% including 10% value added tax (VAT). How much does he get back while leaving Nepal?
Solution:
Here, rate of discount = 15%
VAT rate = 10%
S.P. of a carved window with VAT = Rs. 5,610
Let, M.P. of the carved window be Rs. x
Now, S.P. after discount = M.P. – Discount % of M.P.
= Rs. x – 15% of Rs. x
= Rs. 0.85x
Also, S.P. with VAT = S.P. + VAT% of S.P.
or, Rs. 5,610 = 0.85x + 10% of 0.85x
or, 5,610 = 0.935x
or, x = 6,000
∴ S.P. without VAT = Rs. 0.85x 6,000 = Rs. 5,100
Again, VAT amount = 10% of Rs. 5,100 = Rs.510
Hence, the tourist gets back Rs. 510 while leaving Nepal.
12. (a) A mobile price is tagged Rs 5,000. If a customer gets 12% discount and adding certain percent VAT reaches as Rs 4,972, find out the VAT percent.
Solution:
Here, M.P. of a mobile = Rs. 5,000
Rate of discount = 12%
S.P. of the mobile with VAT = Rs. 4,972
VAT rate = ?
Now, S.P. after discount = M.P. – Discount % of M.P.
= Rs. 5,000 – 12% of Rs. 5,000
= Rs. 4,400
Also, VAT amount = S.P. with VAT – S.P. after discount
= Rs. 4,972 – Rs. 4,400
= Rs. 572
Again, VAT percent = VAT amount / S.P. after discount × 100%
= Rs. 572 / Rs. 4400 × 100%
= 13%
Hence, the required VAT rate is 13%.
12. (b) The marked price of a bag is Rs 2,000. The price of the bag becomes Rs 1,921 after 15% discount and adding VAT amount. Find the rate of VAT.
Solution:
Here, M.P. of a bag = Rs. 2,000
Rate of discount = 15%
S.P. of the bag with VAT = Rs. 1,921
VAT rate = ?
Now, S.P. after discount = M.P. – Discount % of M.P.
= Rs. 2,000 – 15% of Rs. 2,000
= Rs. 1,700
Also, VAT amount = S.P. with VAT – S.P. after discount
= Rs. 1,921 – Rs. 1,700
= Rs. 221
Again, VAT percent = VAT amount / S.P. after discount × 100%
= Rs. 221 / Rs. 1700 × 100%
= 13%
Hence, the required VAT rate is 13%.
13. (a) Mrs Karki purchased a sari for Rs 8,000 and sold it for Rs 11,300 with 13% VAT. Find her profit or loss percent.
Solution:
Here, C.P. of a sari = Rs. 8,000
S.P. with 13% VAT = Rs. 11,300
Let, S.P. excluding VAT be Rs. x.
Then, S.P. with VAT = S.P. + VAT% of S.P.
or, Rs. 11,300 = x + 13% of x
or, Rs. 11,300 = 1.13x
or, x = 10,000
∴ S.P. of the sari is Rs. 10,000
Now, profit amount = S.P. – C.P.
= Rs. 10,000 – Rs. 8,000
= Rs. 2,000
Again, profit percent = Profit amount / C.P. × 100%
= Rs. 2000 / Rs. 8000 × 100%
= 25%
Hence, Mrs. Karki makes 25% profit.
(b) A supplier bought a scanner machine for Rs 35,000 and sold it for Rs 47,460 with 13% VAT. Find the profit or loss percent of the supplier.
Solution:
Here, C.P. of a scanner machine = Rs. 35,000
S.P. with 13% VAT = Rs. 47,460
Let, S.P. excluding VAT be Rs. x.
Then, S.P. with VAT = S.P. + VAT% of S.P.
or, Rs. 47,460 = x + 13% of x
or, Rs. 47,460 = 1.13x
or, x = 42,000
∴ S.P. of the scanner machine is Rs. 42,000
Now, profit amount = S.P. – C.P.
= Rs. 42,000 – Rs. 35,000
= Rs. 7,000
Again, profit percent = Profit amount / C.P. × 100%
= Rs. 7000 / Rs. 35000 × 100%
= 20%
Hence, the supplier makes 20% profit.
15. (a) After allowing 15% discount on the marked price of a camera, 13% VAT was levied and sold it. If the selling price of the camera with VAT is Rs 4,420 more than its price after discount, find the marked price of the camera.
Solution:
Here, rate of discount = 15%
VAT rate = 13%
S.P. with VAT – S.P. after discount = Rs. 4,420
Let, M.P. of the camera be Rs. x
Now, S.P. after discount = M.P. – Discount % of M.P.
= Rs. x – 15% of Rs. x
= Rs. 0.85x
Again, S.P. with VAT = S.P. + VAT% of S.P.
= 0.85x + 13% of 0.85x
= 0.9605x
According to question,
S.P. with VAT – S.P. after discount = Rs. 4,420
or, 0.9605x – 0.85x = 4,420
or, 0.1105x = 4,420
or, x = 40,000
Hence, the marked price of the camera is Rs. 40,000.
15. (b) A projector was sold after allowing 10% discount on the marked price and levying 13% VAT. If the selling price of the projector after discount is Rs 5,850 less than its selling price with VAT, find the marked price of the projector.
Solution:
Here, rate of discount = 10%
VAT rate = 13%
S.P. with VAT – S.P. after discount = Rs. 5,850
Let, M.P. of the projector be Rs. x
Now, S.P. after discount = M.P. – Discount % of M.P.
= Rs. x – 10% of Rs. x
= Rs. 0.9x
Again, S.P. with VAT = S.P. + VAT% of S.P.
= 0.9x + 13% of 0.9x
= 0.1017 x
According to question,
S.P. with VAT – S.P. after discount = Rs. 5,850
or, 0.1017x – 0.9x = 5,850
or, 0.1117x = 5,850
or, x = 50,000
Hence, the marked price of the projector is Rs. 50,000.
16. (a) The marked price of a digital watch is Rs 6,000. After allowing 10% discount and including same percentage of value added tax, the watch is sold. By howl much percent is the VAT amount less than discount amount?
Solution:
Here, M.P. of a digital watch = Rs. 6,000
Rate of discount = 10%
VAT rate = 10%
Now, discount amount = 10% of Rs. 6,000 = Rs. 600
Also S.P. after discount = M.P. – Discount
= Rs. 6,000 – Rs. 600
= Rs. 5,400
Again, VAT amount = VAT% of S.P.
= 10% of Rs. 5,400
= Rs. 540
Difference between discount and VAT amount = Rs. 600 – Rs. 540 = Rs. 60
Hence, the VAT amount is less than the discount amount by Rs 60 / Rs.600 × 100% = 10%
16. (b) The marked price of a guitar is Rs 5,500. After allowing 10% discount and levying same percentage of VAT, the guitar is sold. By how much percent is the VAT amount less than discount amount?
Solution:
Here, M.P. of a digital watch = Rs. 5,500
Rate of discount = 10%
VAT rate = 10%
Now, discount amount = 10% of Rs. 5,500 = Rs. 550
Also S.P. after discount = M.P. – Discount
= Rs. 5,500 – Rs. 550
= Rs. 4,950
Again, VAT amount = VAT% of S.P.
= 10% of Rs. 4,950
= Rs. 495
Difference between discount and VAT amount = Rs. 550 – Rs. 495 = Rs. 55
Hence, the VAT amount is less than discount amount by Rs.55 / Rs.550 × 100% = 10%
17. (a) A wholesaler sold a photocopy machine for Rs 48,000 to a retailer. The retailer spent Rs 2,000 for transportation and Rs 1,500 for the local tax. If the retailer sold it at a profit of Rs 4,500 to a customer, how much did the customer pay for it with 13% VAT?
Solution:
Here,
For wholesaler, S.P. of a photocopy machine = Rs. 48,000
C.P. of the photocopy machine = Rs. 48,000
For retailer, Transportation cost = Rs. 2,000 and local tax = Rs. 1,500
Now,
C.P. with transportation cost and local tax = Rs. 48,000 + Rs. 2,000 + Rs. 1,500
= Rs. 51,500
Profit = Rs. 4,500
∴ S.P. of the photocopy machine = Rs. 51,500 + Rs. 4,500 = Rs. 56,000
Again, S.P. with 13% VAT = Rs. 56,000 + 13% of Rs. 56,000
= Rs. 63,280
Hence, the customer paid the machine for Rs. 63,280.
17. (b) The Buddha supplier sold a digital T-shirt printer for Rs 3,00,000 to Everest supplier. The Everest supplier spent Rs 5,500 for transportation and Rs 2,500 for the local tax and sold at a profit of 10% to a customer. How much did the customer pay for the printers with 13% VAT?
Solution:
Here,
For Buddha supplier, S.P. of a T-shirt printer = Rs. 3,00,000
For Everest supplier, C.P. of the photocopy machine = Rs. 3,00,000
Transportation cost = Rs. 5,500 and local tax = Rs. 2,500
Now,
C.P. with transportation cost and local tax = Rs. 3,00,000 + Rs. 5,500 + Rs. 2,500
= Rs. 3,08,000
Also, profit = 10% of Rs. 3,08,000 = Rs. 30,800
∴ S.P. of the printer = Rs. 3,08,000 + Rs. 30,800 = Rs. 3,38,800
Again, S.P. with 13% VAT = Rs. 3,38,800 + 13% of Rs. 3,38,800
= Rs. 3,82,844
Hence, the customer paid the printer for Rs 3,82,844.
(c) A wholesaler purchased a washing machine for Rs 60,000 and sold it to a retailer at 10% profit. The retailer spent Rs 2,400 for transportation and Rs 1,600 for local tax. Then she sold it to a customer at 12% profit. How much did the customer pay for it with 13% VAT?
Solution:
Here,
For wholesaler, C.P. of a washing machine = Rs. 60,000
S.P. of a washing machine = C.P. + profit % of C.P.
= Rs. 60,000 + 10% of Rs. 60,000
= Rs. 66,000
For retailer, C.P. of the washing machine = Rs. 66,000
Transportation cost = Rs. 2,400 and local tax = Rs. 1,600
Now,
C.P. with transportation cost and local tax = Rs. 66,000 + Rs. 2,400 + Rs. 1,600
= Rs. 70,000
Also, S.P. of the washing machine = Rs. 70,000 + 12% of Rs. 70,000
= Rs. 78,400
Again, S.P. with 13% VAT = Rs. 78,400 + 13% of Rs. 78,400
= Rs. 88,592
Hence, the customer paid the washing machine for Rs 88,592.
18. (a) A retailer allowed 4% discount on his goods to make 20% profit and sold a refrigerator for Rs 10,848 with 13% VAT. By how much is the discount to be increased so that he can gain only 15%?
Solution:
Here, rate of discount = 4%
VAT rate = 13%
S.P. with VAT = Rs. 10,848
Let, M.P. of the refrigerator be Rs. x
Now, S.P. after discount = Rs. x – 4% of Rs. x = Rs. 0.96x
Also, S.P. with VAT = S.P. + VAT% of S.P.
or, Rs. 10,848 = 0.96x + 13% of 0.96x
or, 10,848 = 1.0848 x
or, x = 10,000
∴ M.P. of the refrigerator = Rs. 10,000 and S.P. = 0.96 × Rs. 10,000 = Rs. 9,600
Again, profit percent = 20%
Let C.P. of the refrigerator be Rs. y.
Then, S.P. = C.P. + profit % of C.P.
or, Rs. 9,600 = y + 20% of y
or, Rs. 9,600 = 1.2y
or, y = 8,000
∴ C.P. of the refrigerator is Rs. 8,000.
And, new S.P. = C.P. + 15% of C.P. = Rs. 8,000 + 15% of Rs. 8,000 = Rs. 9,200
New discount amount = M.P. – new S.P. = Rs. 10,000 – Rs. 9,200 = Rs. 800
Then, new percent = New discount / M.P. × 100% = 800 / 10000 × 100% = 8%
∴ Increment in discount percent = 8% – 4% = 4%
Hence, the discount is to be increased by 4%.
18. (b) A supplier sold a scanner machine for Rs 41,400 with 15% VAT after allowing 10% discount on its marked price and gained 20%. By how much is the discount percent to be reduced to increase the profit by 4%?
Solution:
Here, rate of discount = 10%
VAT rate = 15%
S.P. of scanner machine with VAT = Rs. 41,400
Let, M.P. of the scanner be Rs. x
Now, S.P. after discount = Rs. x – 10% of Rs. x = Rs. 0.9x
Also, S.P. with VAT = S.P. + VAT% of S.P.
or, Rs. 41,400 = 0.9x + 15% of 0.9x
or, 41,400 = 1.035 x
or, x = 40,000
∴ M.P. of the scanner = Rs. 40,000 and S.P. = 0.9 × Rs. 40,000 = Rs. 36,000
Again, profit percent = 20%
Let C.P. of the scanner be Rs. y.
Then, S.P. = C.P. + profit % of C.P.
or, Rs. 36,000 = y + 20% of y
or, Rs. 36,000 = 1.2y
or, y = 30,000
∴ C.P. of the scanner is Rs. 30,000.
And, profit percent = 20% + 4% = 24%
New S.P. = C.P. + 24% of C.P. = Rs. 30,000 + 24% of Rs. 30,000 = Rs. 37,200
New discount amount = M.P. – new S.P. = Rs. 40,000 – Rs. 37,200 = Rs. 2,800
Then, new percent = New discount / M.P. × 100% = 2800 / 40000 × 100% = 7%
∴ Reduction in discount percent = 10% – 7% = 3%
Hence, the discount is to be decreased by 3%.
18. (c) A retailer hired a room in a shopping mall at Rs 45,000 rent per month and started a business of garments. He spent Rs 20,00,000 to purchase different garment items in the first phase and marked the price of each item 30% above the cost price. Then, he allowed 10% discount on each item and sold to customers. His monthly miscellaneous expenditure was Rs 15,000 and the items of worth 10% of the investment remained as stocks after two months. Find his net profit or loss percent.
Solution:
Here, the amount of investment = Rs. 20,00,000
Stocks after two months = 10% of Rs. 20,00,000 = Rs. 2,00,000
∴ The investment excluding stocks = Rs. 20,00,000 – Rs. 2,00,000 = Rs. 18,00,000
Now, M.P. of the items = 130% of Rs. 18,00,000 = Rs. 23,40,000
Discount percent = 10%
∴ S.P. of the items = 90% of M.P. = 90% of Rs.23,40,000 = Rs. 2,106,000
∴ Gross profit = Rs. 2,106,000 – Rs. 18,00,000 = Rs. 3,06,000
Again, the rent of room in 2 months = 2 × Rs. 45,000 = Rs. 90,000
Miscellaneous expenditure in 2 months = 2 × Rs. 15,000 = Rs. 30,000
∴ Total expenditure = Rs. 90,000 + Rs. 30,000
= Rs. 1,20,000
Now, net profit = Gross profit – total expenditure
= Rs. 3,06,000 – Rs. 1,20,000 = Rs. 1,86,000
Then, net percent = net profit / investment × 100% = 186000 / 1800000 × 100% = 10.33%
Hence, her net profit percent is 10.33%.
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