Tax Calculation
1. **Problem Statement:** Calculate the tax due based on the taxable income using the given tax brackets and formula:
$$\text{TAX DUE} = a + b \times (\text{Income} - c)$$
where $a$ is the basic amount, $b$ is the additional rate, and $c$ is the excess income threshold.
2. **Understanding the Tax Brackets:**
- For income up to 250,000, no tax is due.
- For income between 250,000 and 400,000, tax is $0 + 0.15 \times (\text{Income} - 250,000)$.
- For income between 400,000 and 800,000, tax is $22,500 + 0.20 \times (\text{Income} - 400,000)$.
- For income between 800,000 and 2,000,000, tax is $102,500 + 0.25 \times (\text{Income} - 800,000)$.
- For income between 2,000,000 and 8,000,000, tax is $402,500 + 0.30 \times (\text{Income} - 2,000,000)$.
- For income above 8,000,000, tax is $2,202,500 + 0.35 \times (\text{Income} - 8,000,000)$.
3. **Example Calculation:** Suppose taxable income is 1,000,000.
- This falls in the 800,000 to 2,000,000 bracket.
- Using the formula:
$$\text{TAX DUE} = 102,500 + 0.25 \times (1,000,000 - 800,000)$$
$$= 102,500 + 0.25 \times 200,000$$
$$= 102,500 + 50,000 = 152,500$$
4. **Explanation:** The tax due is calculated by adding the basic amount for the bracket plus the additional rate multiplied by the amount exceeding the lower limit of the bracket.
5. **Summary:** To find tax due for any income, identify the correct bracket, then apply the formula $a + b \times (\text{Income} - c)$ accordingly.
This method ensures progressive taxation based on income ranges.