1. A taxpayer's annual income increases by 5.2 lakh, but the income tax rate decreases from 12% to 10%. If he now pays 10,000 more in taxes than before, what is his current (increased) income?
A) 21 lakh
B) 24.8 lakh
C) 26.2 lakh
D) 31.2 lakh
Correct Answer: C
Let original income be x. <br>Original Tax = 12% of x = 0.12x. <br>New income = x + 5.2. <br>New Tax = 10% of (x + 5.2) = 0.10(x + 5.2). <br>Given: New Tax - Old Tax = 10,000 = 0.1 lakh. <br>0.10(x + 5.2) - 0.12x = 0.1 <br>0.1x + 0.52 - 0.12x = 0.1 <br>-0.02x = -0.42 ⇒ x = 21. <br>Current income = 21 + 5.2 = 26.2 lakh.