MAT Exam 2023 Paper

Concept:Tax is calculated only on the taxable income, which is $80\%$ of total income.The tax amount remains the same even though income increases and the tax rate decreases.Explanation:Let the original income be $x$.Taxable income originally $= 80\%$ of $x = 0.8x$.Tax paid originally $= 12\%$ of $0.8x = 0.096x$.New income $= x + 1600$.Taxable income now $= 0.8(x + 1600)$.Tax paid now $= 10\%$ of $0.8(x+1600) = 0.08(x+1600)$.Since the tax paid remains the same:$$0.096x = 0.08(x+1600)$$$$0.096x = 0.08x + 128$$$$0.016x = 128$$$$x = 8000$$Therefore, increased income $= x + 1600 = 8000 + 1600 = ₹9600$.Answer:The increased income is ₹9,600.Correct option: B.