The tax rates for various income slabs are given below.
There are 15 persons working in an organization. Out of them, 3 to 5 persons are falling in each of the income slabs mentioned above. Which of the following is the correct tax range of the 15 persons? (E.g. If one is earning Rs. 2000, the tax would be: 500 × 0 + 1500 × 0.05)
Answer: A
Total tax will be minimum if income of 5 persons is not more than 500 and income of 4 persons is minimum and also in the range (500, 2000]. Total tax will be maximum if income of 5 persons is maximum possible and income of 4 persons is maximum in the range (2000, 5000].
Minimum tax > (5 × 0) + (4 × 0) + (3 × 75) + (3 × 375) = Rs. 1350
Maximum tax range < (3 × 0) + (3 × 75) + (4 × 375) + (5 × 1125) = Rs. 7350
Hence, option (a).