If the marginal tax rate is 40% and an individual's income rises from Rs 10,000 to Rs 12,000, what will be the total tax amount paid?

Show Answers

The tax paid will go up by Rs 4,800The tax paid will increase by Rs 4,000The tax paid will rise by Rs 800The overall tax paid will be Rs 4,800The total tax paid will be Rs 4,000

Explanation

Since the marginal tax rate is 40%, the total tax on an income of Rs 12,000 is 40% of 12,000, which equals Rs 4,800. Therefore, the total tax paid amounts to Rs 4,800.