J4

More documents

Recommendations

Info

Income Tax This is a tax levied on peoples’ incomes. Income is a payment received by Someone who gets involved in a legal gainful activity. Examples include: Profit, salary, wages, interest, commission, fees, rent, overtime pay e.t.c. Gross income is the total income that an individual receives from wages, salary, leave pay, overtime pay, medical allowance, transport allowance e.t.c. Taxable income is the income on which income tax is levied. It is arrived at by deducting from the gross income the amount of allowances. Thus, taxable income = gross income – allowances Example In a certain country income tax is levied as follows: A person’s monthly gross Income has certain allowances deducted from it before it is subjected to taxation. Each child below ten years sh. 5 000 Each child above ten years but less than 18 years – sh. 7 000 Married man: sh. 18 000 Transport allowance: sh. 17 000 David earns sh. 450 000 per month, he is married with 3 children of ages between 2 and 10 years, 2 children above twelve but less than 18 years. Calculate: (i) the taxable income of David (ii) the income tax he paid; if the rates are: Taxable income (sh) Rate(%) 0 – 100 000 10 100 001 – 200 000 20 200 001 – 300 000 30 300 001 – 400 000 45 400 001 - and above 50 Solution (i) David’s allowances Marriage 18 000 Transport 17 000 3 children 3 х 5 000 = 15 000 2 children 2 х 7 000 = 14 000 Total allowances 64 000 Taxable income = 450 000 – 64 000 = sh. 386 000
(ii) income tax (sh.) 10 100 000 100 000 х 100 = 10 000 20 100 000 100 000 х 100 30 100 000 100 000 х 100 45 86 000 86 000 х 100 = 20 000 = 30 000 = 38 700 Example Total income tax = sh. 98 700 The table below shows the income tax rate of a certain country for government employees. This is applied after the allowances have been already deducted. Taxable income (sh) Rate(%) 0 – 100 000 0 100 001 – 200 000 5 200 001 – 300 000 10 300 001 – 450 000 20 450 001 - 550 000 30 550 001 – and above 50 An employee has a gross monthly income of sh. 600 000 and is entitled to the following allowances. Marriage: sh. 120 000 per annum Housing and transport:10% of the gross monthly income. Medical care: sh. 240 000 per annum. Calculate: (i) the amount an employee pays as monthly income tax. (ii) the net monthly income. Solution (i) Allowances: Marriage 120 000 12 = 10 000 10 Housing and transport 600000 = 100 60 000 Medical care sh. 240 000 12 = 20 000 Total allowances = 90 000
Page 1 and 2: APPROXIMATIONS Rounding off Example
Page 3 and 4: Significant figures (sf) Significan
Page 5 and 6: Exercise 1. A man in Nairobi receiv
Page 7 and 8: 3. A radio that cost sh. 15 000 was
Page 9 and 10: 1 20000 ×1 2 × 21 Therefore, = sh
Page 11 and 12: 8. A business man had sh. 1 200 000
Page 13: 2. A dealer marks a price sh. 4 800
Page 17 and 18: (b) Express the total income tax fo
Page 19 and 20: O is at the vertex of the angle, an
Page 21 and 22: Exercise 1. In the figure shown, x
Page 23 and 24: t s 75 0 Solution s and 75 0 are ve
Page 25 and 26: The measurements of the scale drawi
Page 27 and 28: 5. The floor of a school hall is re
Page 29 and 30: (i) Compass bearings On a compass,
Page 31 and 32: N A B 15km S 75 0 A Then we choose
Page 33 and 34: - We measure AB = 4.8cm. But 1cm re
Page 35 and 36: Types of polygons Name Number of si
Page 37 and 38: 50 0 +w +x = 180 0 50 0 + 50 0 + x
Page 39 and 40: (d) (e) Quadrilaterals These are fl
Page 41 and 42: n n-2 From the above table we see t
Page 43: 8. One of the large and one of the

J4

You also want an ePaper? Increase the reach of your titles

Delete template?

Save as template?