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April 20th, 2019, 12:29 PM   #1
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What is his taxable income and his tax free allowances?

If the rates of tax consists of 10% on the first N 20 000 taxable income, 15% on the next N 20 000, 20% on the next N 20 000, and 25% on the next N 20 000; a man earns a salary of N 124 600 a year and pays an income tax of N 12 760. What is his taxable income and his tax free allowances?
My problem is what do I do to get the taxable income? If I can get the taxable income, I can get the tax free allowances.
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April 20th, 2019, 02:11 PM   #2
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Quote:
If the rates of tax consists of 10% on the first N 20 000 taxable income,
15% on the next N 20 000, 20% on the next N 20 000, and 25% on the
next N 20 000; a man earns a salary of N 124 600 a year and pays an
income tax of N 12 760. What's his taxable income and tax free allowances?
Code:
                     tax     total tax
124600
 20000   .10   2000    2000
--------
104600 
 20000   .15   3000    5000
--------
 84600  
 20000   .20   4000    9000
--------
 64600
 15040   .25   3760  12760
--------
 49560 = tax free
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April 26th, 2019, 03:34 AM   #3
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Quote:
Originally Posted by Denis View Post
Code:
                     tax     total tax
124600
 20000   .10   2000    2000
--------
104600 
 20000   .15   3000    5000
--------
 84600  
 20000   .20   4000    9000
--------
 64600
 15040   .25   3760  12760
--------
 49560 = tax free
From what you have done so far, I can say the taxable income is
₦124 600 - ₦49 560 = ₦75 040:
eek: But this baffles me. From what you did above, I can say that you calculated the tax from the salary which comprises both the taxable income and tax free income.
I even have to check the tax from the taxable income:
₦75 040 = ₦20 000 + ₦20 000 + ₦20 000 + ₦15 040
₦20 000 tax of ₦2 000
₦20 000 tax of ₦3 000
₦20 000 tax of ₦4 000
₦15 040 tax of ₦3 760
Total tax = ₦12 760
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