## Class 9 Mathematics Note

# COMMISSION, TAXATION AND BONUS

**Commission, Taxation and Bonus **

**Commission:** The payment of commission as remuneration for services rendered or products sold is a common way to reward sales people. Payments often will be calculated on the basis of a percentage of the goods sold.

Commission =percent of commission* total selling price

**Taxation** refers to the act of a taxing authority actually levying tax. Taxation as a term applies to all types of taxes, from income to gift to estate taxes. It is usually referred to as an act; any revenue collected is usually called "taxes."

**Bonus** is an extra payment (bonus payment) received for doing one's job well.

**Income tax:** An income tax is a tax that governments impose on financial income generated by all entities within their jurisdiction. By law, businesses and individuals must file an income tax return every year to determine whether they owe any taxes or are eligible for a tax refund. Income tax is a key source of funds that the government uses to fund its activities and serve the public.

Taxable income = Taxable income - Tax free allowance

Income tax = Rate of tax (%) * taxable income

**Value added Tax**

A value-added tax (VAT) is a type of consumption tax that is placed on a product whenever value is added at a stage of production and at final sale. VAT is most often used in the European Union. The amount of VAT that the user pays is the cost of the product, less any of the costs of materials used in the product that have already been taxed.

VAT amount = Rate of VAT(%)* selling price

S.P with VAT = S.P + VAT % of S.P or VAT amount

S.P after discount = M.P - discount % of S.P

**Examples**

1.A business company distributed bonus to its 24 employees from the net profit of Rs 16, 48000 .If every employee received Rs 8,240. What was the bonus percent.

Soln

Bonus amount = Rs. 8,240.

Total bonus amount = Rs. 8,240 * 24 = Rs. 1, 97,760.

Total profit = Rs. 16, 48,000.

So, bonus percent % = ?

Now,

Bonus amount = Bonus percent * Total profit.

Or, Rs. 8,240 = x% * 16,48,000

Or, $\frac{{1,97,760}}{{1648000}}$ = $\frac{{\rm{x}}}{{100}}$

So, x = 12%.

So, the bonus percent is 12%.

2.Whena business company increased profit from 20% to 25%the amount of profit increased to Rs 25, 04,000.If the company decided to distribute 50%bonus to its 20%emplyoees equally from increased amount of profit , How much bonus will each employee receive ?

Total increment of profit % = 5%.

When the profit was 20% the amount was Rs. x

But when the profit increased to 25% the amount increased to Rs. 26, 04,000.

Or, 5% of x + x = Rs. 26, 04,000

Or, $\frac{5}{{100}}$x + x = Rs. 26,04,000

Or, 1.05x = Rs. 26, 04,000

So, x = Rs. 24, 80,000

So, the previous bonus amount was Rs. 24,80,000.

Now, increased profit = Rs. 26,04,000 – Rs. 24,80,000= Rs. 1,24,000

Since, 50% of the new increased profit was distributed.

So, 50% of 1,24,000 = Bonus amount

Or, $\frac{{50}}{{100}}$ * 1,24,000 = Bonus amount.

So, Bonus amount = Rs. 62,000

So, when it was distributed among 20 people each received = Rs. $\frac{{62,000}}{{20}}$= Rs. 3,100.

3.The tax free allowance of the annual income for an unmarried individual is Rs 1, 40,000. If the annual income of a man is Rs 2, 20,000. How much income tax should he pay at 15% in a year?

Soln

Annual income of a man = Rs. 2, 20,000

Now, Taxable income = Rs. 2, 20,000 – Rs. 1, 40,000

= Rs. 80,000

So, Tax % = 15%.

So, Tax amount = Tax% * Taxable account

= 15% * Rs. 80,000 = Rs. 12,000

So, he should pay Rs. 12,000 tax.

4.Out of total annual earning , the tax is exempted up to Rs 1,40,000If 15%tax is levied on from Rs 1,40,000 to Rs 4,40,000sand 255 Tax is levied on above Rs 4,40,000. How much tax is paid by an individual whose annual earningis Rs 7,50,000?

Taxable income = Rs. 7,50,000 – Rs. 1,40,000 = Rs. 6,10,000

So, tax on Rs. 1,40,000 to Rs. 4,40,000 is 25%.

So, Tax amount = Tax% * Taxable income= 15% * 4,40,000= Rs. 66,000.

Now, for remaining amount

Taxable amount = Rs. 6,10,000 – 4,40,000= Rs. 1,70,000

Now, Tax amount = Tax % * Taxable income= 25% * Rs. 1,70,000= Rs. 42,500

So, Total tax amount = Rs. 66,000 + Rs. 42,500

= Rs. 1, 08,500