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Question
A company pays a dividend of 15% on its ten-rupee shares from which it deducts income tax at the rate of 22%. Find the annual income of a man who owns one thousand shares of this company.
Solution
Nominal value of 1 share = Rs. 10
Nominal value of 1000 shares = 1000 × 10 = Rs. 10,000
∴ Dividend = 15% of Rs. 10,000
= `15/100 xx 10000`
= Rs. 1,500
∴ Income tax paid = 22% of Rs. 1,500
= `22/100 xx 1500`
= Rs. 330
His net income = Rs. 1,500 – Rs. 330 = Rs. 1,170
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