A man has a wife with six children and his total income is Gh$8500.He was allowed the following free tax personal:......$1200 wife:...........$300 each child:.....$250 for a maximum of 4 dependant relative:$400 insurance:........$250 Taxed: the first $2000 at 10% the next $2000 at 15% the next $2000 at 20% the next $2000 at 25% calculate a)his tax free income b)his income tax c)his monthly income d)his net monthly income


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Question Number 120563 by rexfordattacudjoe last updated on 01/Nov/20

$A m a n h a s a w i f e w i t h s i x$ $c h i l d r e n a n d h i s t o t a l i n c o m e i s$ $G h $ 8500 . H e w a s a l l o w e d t h e$ $f o l l o w i n g f r e e t a x$ $p e r s o n a l : . . . . . . $ 1200$ $w i f e : . . . . . . . . . . . $ 300$ $e a c h c h i l d : . . . . . $ 250 f o r a m a x i m u m o f 4$ $d e p e n d a n t r e l a t i v e : $ 400$ $i n s u r a n c e : . . . . . . . . $ 250$ $T a x e d :$ $t h e f i r s t $ 2000 a t 10 %$ $t h e n e x t $ 2000 a t 15 %$ $t h e n e x t $ 2000 a t 20 %$ $t h e n e x t $ 2000 a t 25 %$ $c a l c u l a t e$ $a) h i s t a x f r e e i n c o m e$ $b) h i s i n c o m e t a x$ $c) h i s m o n t h l y i n c o m e$ $d) h i s n e t m o n t h l y i n c o m e$
	Answered by prakash jain last updated on 01/Nov/20

	$Tax Free Income (man, wife and 4 children)$ $1200 + 300 + 4 \times 250 = 2500$ $Remain 2 children are dependent$ $relatives so addl 400 deduction .$ $2500 + 400 = 2900$ $250 for insurance$ $so total tax free income = 2900 + 250$ $= 3150$ $Taxable Income = 8500 - 3150 = 4350$ $Tax = 2000 \times 10 % + 2000 \times 15 % + 350 \times 20 %$ $= 200 + 300 + 70 = 570$ $Net Icome = 8500 - 570 = 7930$ $The question does not state whether$ $8500 is monthly$
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