A man's annual income has increased by Rs 1.2 lakhs but the tax on income that he has to pay has reduced from 12% to 10%. He now pays the same amount of tax as before. What is his increased income (in Rs lakhs)?
Show answer & explanation
Correct answer: B
Explanation
The correct answer is option 2 i.e. 7.2
Let the increased income be Rs x lakhs
Previous income = Rs (x - 1.2) lakh
ATQ
(x - 1.2) × 12/100 = x × 10/100
⇒ 2x = 14.4
⇒ x = 7.2
Hence,
Increased income = Rs. 7.2 lakhs