A man's annual income has increased by ₹20 lakhs 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 earlier. What is his new total income(in ₹ lakhs)?
Answer & explanation
Correct answer: option 1
Ratio of Old : New
Tax 20 : 16
5 : 4
Income 4 : 5
ATQ,
(5R - 4R) = 20 lakh
New total income = 5R = 5 × 20 = 100 lakh