A taxpayer is allowed 1/8th of his income tax fee, & pays 20% on the remainder. If he pays N490 tax, what is his income?

Answer 1

Let "S" be the income.

Tax on income T= 1/8S ------------> 1

Paid mount = 490 = 20% T = 0.2T ------> T = 490/0.2 = 2450

Substitute T = 2450 in equation 1.

2450 = 1/8 S

S = 2450 * 8 = 19600

Income is 19600.