Math 9

Commission and Taxation

b) Mrs. Anjali Subba is a medical doctor in a government hospital. Her monthly salary is
Rs 36,900 and she receives one month's salary as festival bonus. 10% of her salary is
deducted as citizen investment trust. How much income tax does she pay in a year?

c) After deducting 10% provident fund a married person draws Rs 40,500 salary per
month and one month's salary as festival bonus, the person pays Rs 14,500 annually
as the premium of his/her insurance. Calculate the annual income tax paid by the
person.

d) Mr. Sayad Sharma an unmarried employee of a UN Project draws monthly salary
of Rs 51,000 after deducting 10% salary in his provident fund and 5% in citizen
investment trust. He also receive the Dashain bonus of one month's salary. He pays
Rs 22,000 annually as the premium of his life insurance. How much income tax does
he pay in a year?

Project work

4. a) Let's ask the monthly salary of your Mathematics, Science, and English teachers.
Then, complete the table given below.

Name of Marital Monthly Festival Provident Insurance
teachers status Salary allowance fund

Now, calculate the annual income tax paid by each subject teacher.

b) If your parents are involved in any government or private service, let's ask their
monthly salary, bonus, provident fund, insurance, etc. Then, calculate the income
tax paid by them in a year.

3.5 Dividend

A dividend is a payment made by a corporation to its shareholders, usually as a
distribution of profits. A dividend is allocated as a fixed amount per share with
shareholders receiving a dividend in proportion to their shareholding.

For example, a person has bought 1,500 shares out of total of 1,00,000 shares of
Rs 100 per share from a hydroelectricity corporation. If the corporation earned a net
profit of Rs 3,50,28,000 in a certain year and it decided to distribute 20% of the net
profit to its shareholders, the amount received by the person as per his/her number of
shares is called his/her dividend.

Worked-out examples

Example 1: Mrs. Bhatta bought 750 shares out of 20,000 shares from a Business
Company. If the company earned a net profit of Rs 90,00,000 and it
declared to distribute 10% dividend to its shareholders, how much money
did Mrs. Bhatta receive?

51Approved by Curriculum Development Centre, Sanothimi, Bhaktapur Vedanta Excel in Mathematics - Book 9

Commission and Taxation

Solution: = Rs 90,00,000
Here, the net profit of the company
= 10% × Rs 90,00,000
Now, 10% of Rs 90,00,000 100

= Rs 9,00,000

Again,

The profit of 20,000 shares = Rs 9,00,000

The profit of 1 share = Rs 9,00,000
20,000

= Rs 45

The profit of 750 shares = 750 × Rs 45 = Rs 33,750
Hence, she received Rs 33,750 as her dividend.

Example 2: A commercial bank sold 30,000 shares. The bank earned a net profit of
Solution: Rs 2,50,00,000 in a year and distributed a certain percent of profit as
dividend. If a shareholder, who has bought 400 shares, received Rs 50,000
dividend, find what percent of profit was distributed as divided by the
bank?

Here, the dividend of 400 shares = Rs 50,000

the dividend of 1 share = Rs 50,000 = Rs 125
400

the dividend of 30,000 shares = Rs 30,000 × Rs 125 = Rs 37,50,000

∴ The total dividend = Rs 37,50,000

The net profit = Rs 2,50,00,000

Now, the percent of net profit as dividend = Dividend × 100%
Net profit

= Rs 37,50,000 × 100%
Rs 2,50,00,000

= 15%

Hence, 15% of the net profit was distributed as dividend by the bank.

Alternative process:

The dividend of 400 shares = Rs 50,000

The dividend of 1 share = Rs 50,000
400

= Rs 125

Also, the net profit for 30,000 shares = Rs 2,50,00,000

The net profit for 1 share = Rs 2,50,00,000 = Rs 2500
30,000 3

Vedanta Excel in Mathematics - Book 9 52 Approved by Curriculum Development Centre, Sanothimi, Bhaktapur