Mr. X salary increased by 20%. On the increase, the tax rate is 10% higher. The percentage increase in tax liability is:

A. 20%

B. 22%

C. 23%

D. 24%

Answer: Option B

Solution(By Examveda Team)

Let his original salary be Rs. 100
Salary after increment = Rs. 120
Let the tax on original salary be 20% and now tax on increased salary (Rs. 20) will be 22% i.e. Rs. 4.40
Thus, increase in tax liability $$ = \frac{{4.40}}{{20}} \times 100 = 22\% $$