How much you should earn for every 100 rupees you spend

You might be wondering what is this article about. Common sense says that we need to earn 100 rupees to spend 100 rupees. This is not the case and banks and government trying their best to hide this from us.

Remember, you will not keep everything you earn. This is not as straight forward as it seems. Let us know about this with a tasty example 😉.

Imagine we need to buy an Ice cream which is of 100 rupees.

Let the gst on that ice cream be 18%. So now the total cost of ice cream is 118 rupees.

Let us imagine that we fall under 20% Income tax bracket. So for every 100 rupees you earn you will only keep 80 rupees of it and rest 20% will be deducted as Income tax.

100 rs x 80% = 80 rs

Remaining amount = 118 rs - 80 rs = 38 rs

For the remaining amount we need to divide by 80 and multiply by 100(because 100 after tax is equivalent to 80) which will result in 47.5

Now add this to initial 100 rs

So there it is for you. To spend 100 rs you need to earn 147.5 rs