Option C

As per IRD circular dated 14th Dec 2010 Option A Wins Hurray!!!!

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Mr. Babu Raja has total income from employment of Rs.25, 10,000

1st Rs.200,000 2,000.00 (1%)

Next Rs.100,000 15,000.00 (15%)

Balance 22,10,000 552,500.00 (25%)

Tax Liability before Additional Tax 5,69,500

Additional Tax @ 40% 227,800

Total Tax Liability 7,97,300.00