Mr. John Smith earns Rs. 1,50,000 per annum as a tax-free income. He has also received Rs. 25,000 as salary for the post of the Vice-President of a company and Rs. 12,000 as rent from his house property. He also received Rs. 2,50,000 from a lottery. Calculate his gross total income.

Leø, let's knock this out. Step 1: Calculate the taxable income. The taxable income is the annual income minus the tax-free allowance. Annual Income = N150,000.00 Tax-Free Allowance = N30,000.00 Taxable Income = N150,000.00 - N30,000.00 = N120,000.00 Step 2: Calculate the tax for each bracket. The tax is calculated progressively based on the taxable income. • First N20,000.00 at 10%: 0.10 × N20,000.00 = N2,000.00 Remaining taxable income: N120,000.00 - N20,000.00 = N100,000.00 • Next N20,000.00 at 12%: 0.12 × N20,000.00 = N2,400.00 Remaining taxable income: N100,000.00 - N20,000.00 = N80,000.00 • Next N20,000.00 at 15%: 0.15 × N20,000.00 = N3,000.00 Remaining taxable income: N80,000.00 - N20,000.00 = N60,000.00 • Next N20,000.00 at 18%: 0.18 × N20,000.00 = N3,600.00 Remaining taxable income: N60,000.00 - N20,000.00 = N40,000.00 • Next N20,000.00 at 20%: 0.20 × N20,000.00 = N4,000.00 Remaining taxable income: N40,000.00 - N20,000.00 = N20,000.00 • The remainder (N20,000.00) at 25%: 0.25 × N20,000.00 = N5,000.00 Step 3: Sum up the tax from all brackets to find the total income tax. Total Income Tax = N2,000.00 + N2,400.00 + N3,000.00 + N3,600.00 + N4,000.00 + N5,000.00 Total Income Tax = N20,000.00 The total income tax for Mr. Ade is: N20,000.00 Send me the next one 📸