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Basics of Financial Mathematics — NCERT Solutions

CBSE · Class 11 · Applied Mathematics

NCERT Solutions for Basics of Financial Mathematics, CBSE Class 11 Applied Mathematics: 5 textbook questions solved step by step.

45 questions25 flashcards3 formulas & key relations5 concepts

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5 Questions Solved · 3 Sections

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1Mr X had income from salary of ₹200000. Income from Capital Gain of ₹150000 and Income from other sources is ₹250000. Contribution to PF is ₹40000, PPF ₹70000, and LIC is ₹40000. Calculate Income Tax Liability of Mr X.Show solution

Step 1: Calculate Gross Total Income

Head of IncomeAmount (₹)
Income from Salary2,00,000
Income from Capital Gains1,50,000
Income from Other Sources2,50,000
Gross Total Income6,00,000

Step 2: Calculate Deductions under Section 80C

ParticularsAmount (₹)
PF Contribution40,000
PPF Contribution70,000
LIC Premium40,000
Total1,50,000

Maximum deduction allowed under Section 80C = ₹1,50,000

Since total = ₹1,50,000, deduction = ₹1,50,000

Step 3: Calculate Total Taxable Income

Total Taxable Income=Gross Total Income−Deductions under 80C\text{Total Taxable Income} = \text{Gross Total Income} - \text{Deductions under 80C}

=₹6,00,000−₹1,50,000=₹4,50,000= ₹6,00,000 - ₹1,50,000 = ₹4,50,000

Step 4: Calculate Income Tax (as per Old Regime slabs)

SlabRateTax (₹)
Up to ₹2,50,000Nil0
₹2,50,001 – ₹5,00,0005%5% × ₹2,00,000 = 10,000
Total Tax10,000

Step 5: Add Health & Education Cess @ 4%

Cess=4%×₹10,000=₹400\text{Cess} = 4\% \times ₹10,000 = ₹400

Step 6: Total Income Tax Liability

Total Tax Liability=₹10,000+₹400=₹10,400\text{Total Tax Liability} = ₹10,000 + ₹400 = \boxed{₹10,400}

Note: A rebate under Section 87A of ₹12,500 is available if total taxable income does not exceed ₹5,00,000. Since taxable income here is ₹4,50,000 (≤ ₹5,00,000), the rebate applies and the tax payable becomes ₹NIL (tax of ₹10,000 < rebate limit of ₹12,500).

∴Income Tax Liability of Mr X=₹0\therefore \text{Income Tax Liability of Mr X} = \mathbf{₹0}

2Mr A had Income from Salary of ₹300000. Income from House property rentals comes out to be ₹150000. Income from Capital gains is ₹300000. Income from other sources is ₹50000. Deductions made under Section 80C: PF – ₹40,000; PPF – ₹40,000; Fixed Deposits – ₹30,000; LIC – ₹40,000. Calculate Income Tax liability of Mr A.Show solution

Step 1: Calculate Gross Total Income

Head of IncomeAmount (₹)
Income from Salary3,00,000
Income from House Property (Rentals)1,50,000
Income from Capital Gains3,00,000
Income from Other Sources50,000
Gross Total Income8,00,000

Step 2: Calculate Deductions under Section 80C

ParticularsAmount (₹)
PF40,000
PPF40,000
Fixed Deposits (Tax Saving, 5-yr)30,000
LIC Premium40,000
Total1,50,000

Maximum deduction allowed under Section 80C = ₹1,50,000

Since total = ₹1,50,000, deduction = ₹1,50,000

Step 3: Calculate Total Taxable Income

Total Taxable Income=₹8,00,000−₹1,50,000=₹6,50,000\text{Total Taxable Income} = ₹8,00,000 - ₹1,50,000 = ₹6,50,000

Step 4: Calculate Income Tax (as per Old Regime slabs)

SlabRateTax (₹)
Up to ₹2,50,000Nil0
₹2,50,001 – ₹5,00,0005%5% × ₹2,50,000 = 12,500
₹5,00,001 – ₹6,50,00020%20% × ₹1,50,000 = 30,000
Total Tax42,500

Step 5: Add Health & Education Cess @ 4%

Cess=4%×₹42,500=₹1,700\text{Cess} = 4\% \times ₹42,500 = ₹1,700

Step 6: Total Income Tax Liability

Total Tax Liability=₹42,500+₹1,700=₹44,200\text{Total Tax Liability} = ₹42,500 + ₹1,700 = \boxed{₹44,200}

Note: Since taxable income exceeds ₹5,00,000, rebate under Section 87A is NOT applicable.

∴Income Tax Liability of Mr A=₹44,200\therefore \text{Income Tax Liability of Mr A} = \mathbf{₹44,200}

GST — Illustrative Example (Section 11.9)

1A product is sold for ₹2000 and GST applicable to that product is 12%. Find the net price of the product after adding GST.Show solution

Given:

  • Original cost of product = ₹2,000
  • GST rate = 12%

Formula:
GST Amount=Original Cost×GST%100\text{GST Amount} = \frac{\text{Original Cost} \times \text{GST\%}}{100}

Step 1: Calculate GST Amount

GST Amount=₹2,000×12100=₹240\text{GST Amount} = \frac{₹2,000 \times 12}{100} = ₹240

Step 2: Calculate Net Price

Net Price=Original Cost+GST Amount\text{Net Price} = \text{Original Cost} + \text{GST Amount}

Net Price=₹2,000+₹240=₹2,240\text{Net Price} = ₹2,000 + ₹240 = \boxed{₹2,240}

∴The net price of the product after adding GST is ₹2,240.\therefore \text{The net price of the product after adding GST is } \mathbf{₹2,240}.

Section 11.11 — Electricity Bill, Water Supply Bills

1Calculate the monthly electricity bill based on the following appliance usage: TV used 4 hours/day at 85 Watts; Toaster used 15 minutes/day at 1000 Watts; Kettle used 2 hours/day at 2400 Watts; 15 light bulbs used 5 hours/day at 100 Watts each. Flat rate tariff is 22 cts/kWh and line charge is ₹1.10/day. (Month = 30 days)

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2Using the given water bill rate structure (Service charge ₹40/month for build-up area up to 200 sq. m; Consumption charges: 0–6000 litres = NIL, 7000–20000 litres = ₹2/litre, 21000–30000 litres = ₹7/litre, above 30000 litres = ₹10/litre; Sewage charge = 50% of consumption charge), calculate the water bill for a house with build-up area up to 200 sq. m for the following monthly consumptions: (a) 6000 litres, (b) 10000 litres, (c) 20000 litres, (d) 21000 litres, (e) 31000 litres.

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Frequently Asked Questions

What are the important topics in Basics of Financial Mathematics for CBSE Class 11 Applied Mathematics?
Key topics in Basics of Financial Mathematics include Interest and Interest Rates, Simple and Compound Interest, Effective Interest Rate and Equivalency, Present Value, Future Value, and Net Present Value. Study these first, then practise questions on each for Class 11 exams.
Are these NCERT Solutions for Basics of Financial Mathematics free?
The first 3 of the 5 solutions on this page are open to read. The other 2 are free with a Super Tutor account — signing up is free and needs no card.
How should I revise Basics of Financial Mathematics for Class 11 exams?
Learn the core ideas first, then work through the 45 practice questions on Basics of Financial Mathematics. Revise definitions regularly and use flashcards for quick recall before the exam.

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