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  • 07 Act 1

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    alfred layco
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    The document provides examples of computing income tax due for business income and compensation income based on graduated tax rates with several tax brackets. For business income of P1,600,000 and P2,800,000, the tax due is P330,000 and P730,000 respectively. For compensation income of P360,000, P1,200,000, P3,000,000 and P650,000, the tax due is P22,000, P230,000, P810,000 and P92,500 respectively. The tax due is calculated by applying the tax rates to income within each bracket.

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    The document provides examples of computing income tax due for business income and compensation income based on graduated tax rates with several tax brackets. For business income of P1,600,000 and P2,800,000, the tax due is P330,000 and P730,000 respectively. For compensation income of P360,000, P1,200,000, P3,000,000 and P650,000, the tax due is P22,000, P230,000, P810,000 and P92,500 respectively. The tax due is calculated by applying the tax rates to income within each bracket.

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    7 views2 pages

    07 Act 1

    Uploaded by

    alfred layco
    The document provides examples of computing income tax due for business income and compensation income based on graduated tax rates with several tax brackets. For business income of P1,600,000 and P2,800,000, the tax due is P330,000 and P730,000 respectively. For compensation income of P360,000, P1,200,000, P3,000,000 and P650,000, the tax due is P22,000, P230,000, P810,000 and P92,500 respectively. The tax due is calculated by applying the tax rates to income within each bracket.

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 2

    1.

    Compute the income tax due for business income:

    Given the graduated income tax rates:

    Amount of Net Taxable Income Rate

    Over But Not Over

    P0 P250,000

    P250,001 P400,000

    P400,001 P800,000

    P800,001 P2,000,000

    P2,000,001 P8,000,000

    P8,000,001 ∞

    a. P1,600,000: Taxable Income = P1,600,000 Tax Due = P30,000 + 25% of (P1,600,000 - P400,000) =
    P30,000 + 25% of P1,200,000 = P30,000 + P300,000 = P330,000

    b. P2,800,000: Taxable Income = P2,800,000 Tax Due = P130,000 + 30% of (P2,800,000 - P800,000) =
    P130,000 + 30% of P2,000,000 = P130,000 + P600,000 = P730,000

    c. P450,000: Taxable Income = P450,000 Tax Due = 20% of (P450,000 - P250,000) = 20% of P200,000 =
    P40,000

    d. P280,000: Taxable Income = P280,000 Tax Due = 0% (since P280,000 falls within the first bracket)

    2. Compute the income tax due on compensation:

    Given the graduated income tax rates:

    Amount of Net Taxable Income Rate

    Over But Not Over

    P0 P250,000

    P250,001 P400,000

    P400,001 P800,000

    P800,001 P2,000,000

    P2,000,001 P8,000,000

    P8,000,001 ∞
    a. Brenda Belmonte - P360,000: Taxable Income = P360,000 Tax Due = 20% of (P360,000 - P250,000) =
    20% of P110,000 = P22,000

    b. Hazel Ramos - P1,200,000: Taxable Income = P1,200,000 Tax Due = P30,000 + 25% of (P1,200,000 -
    P400,000) = P30,000 + 25% of P800,000 = P30,000 + P200,000 = P230,000

    c. Alvin Vargas - P3,000,000: Taxable Income = P3,000,000 Tax Due = P490,000 + 32% of (P3,000,000 -
    P2,000,000) = P490,000 + 32% of P1,000,000 = P490,000 + P320,000 = P810,000

    d. Irish Padua - P650,000: Taxable Income = P650,000 Tax Due = P30,000 + 25% of (P650,000 - P400,000)
    = P30,000 + 25% of P250,000 = P30,000 + P62,500 = P92,500

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