04

Case Study

Taxation is done in different ways in several categories. It is difficult to calculate

manually and you are assigned to create a tax calculator to make it easier. When the
amount earned under each tax category is input, the system should calculate the
amount of tax to be paid and give it as output. Also, this system has the ability to
calculate leasing payments.

Figure 1 – Use case Diagram

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 Requirements

You are supposed to create a Java application to calculate TAX. In the

application, you need to implement the following use cases.
When you run the application, you should come up with something similar to
the following Command Line Interface (CLI), where the user can enter an option
number that he wants to execute. This will be the Home Page of the application that
you will be developing.

Figure 2 - Home Page of the TAX CALCULATOR

Calculator System

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 1. Withholding Tax

There are three categories of Withholding Tax. When the user selects the
Withholding Tax category correctly, the user can see the following output related
to the category. The withholding Tax options are given below (Figure 3) and the
user can enter an option number that he wants to execute.

Figure 3 - Withholding TAX options

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 I. Rent Tax

Rent Tax is a tax that is collected by the organization when a person provides
a service to the organization. In Rent Tax, 10% is charged for all payments above
Rs.100 000, and no tax is charged up to Rs.100 000. If the service value is less than
Rs.100 000, print “You don’t have to pay Rent Tax...”. (Figure 5)
When the user inputs the payment amount, the system should count the
amount of the Rent Tax and display it (Figure 4).

Figure 4 - Rent Tax calculate

Figure 5 – When service charge less than Rs.100 000

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 II. Bank Interest Tax

Bank Interest Tax is charged from the annual bank interest. Bank Interest Tax
is 5% of annual interest. When the user inputs the annual bank interest amount, the
system should count the amount of the Bank Interest Tax and display it (Figure 6).

Figure 6 – Bank Interest Tax

III. Dividend Tax

Dividend Tax is a tax that is collected from stock market dividends. In

Dividend Tax, 14% is charged for all dividends above Rs.100 000, and no tax is
charged up to Rs.100 000. If the dividend value is less than Rs.100 000, print “You
don’t have to pay Dividend Tax….”.

Figure 7 - Dividend Tax Calculator

System

Figure 8 – When dividend TAX less than Rs.100 000

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 2. Payable Tax

The company keeps a percentage of an employee’s salary and pays it as a tax,

it is called Payable Tax. The percentage of monthly Payable Tax is given below.

• Payable Tax is charged above Rs.100 000 and no tax is charged up to Rs.100 000.
• Rs.100 000 to the 1st Rs.41 667 (100 000 – 141 667) - 6%
• Rs.141 667 to the 2 nd
Rs.41 667 (141 667 – 183 333) - 12%
• Rs.183 333 to the 3rd Rs.41 667 (183 333 – 225 000) - 18%
• Rs. 225 000 to the 4 Rs.41 667 (225 000 – 266 667) - 24%
th

• Rs.266 667 to the 5th Rs.41 667 (266 667 – 308 333) - 30%
• More than Rs.308 333 - 36%

Several monthly incomes and the total Payable Tax are given in the above table.
Ex:- If an employee receives Rs.900 000 salary per month, his total amount of
monthly Payable Tax is Rs.250 500.

Figure 9 - Payable Tax

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 Figure 10 – When Payable TAX less than Rs.100 000

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 3. Income Tax

Income Tax is the amount of tax paid on the annual income of the person.
The percentage of annual Income Tax is given below.

• Income Tax is charged above Rs.1,200,000 and no tax is charged up to

Rs.1,200,000.
• Rs.1 200 000 to the 1st Rs.500 000 (1 200 000 – 1 700 000) - 6%
• Rs.1 200 000 to the 2nd
Rs. 500 000 (1 700 000 – 2 200 000) - 12%
• Rs.1 200 000 to the 3rd Rs. 500 000 (2 200 000 – 2 700 000) - 18%
• Rs.1 200 000 to the 4 Rs. 500 000 (2 700 000 – 3 200 000) - 24%
th

• Rs.1 200 000 to the 5th Rs. 500 000 (3 200 000 – 3 700 000) - 30%
• More than Rs. 3 700 000 - 36%

Figure 11 - Income Tax

Figure 12 – When Income TAX less than Rs.1 200 000

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 4. Social Security Contribution Levy (SSCL) Tax

A Social Security Contribution Levy (SSCL) is a payable tax imposed on

importers, manufacturers, service providers, wholesalers, and retailers. SSCL Tax
calculates in two steps. The steps are given below.

Step 1
Add sale tax to the value. (Sale Tax -2.5%)
Ex:- value of Goods -100 000
Sale tax - 100 000*2.5% = 2 500
Value of Goods ( after sale tax added ) – 100 000 + 2 500 = 102 500

Step 2
Add VAT to the Value of Goods after sale tax added.(VAT -15%)
Ex:- Value of Goods ( after sale tax added ) – 102 500
Value of Goods ( after VAT added ) – 102 500*15% = 15 375

Total SSCL Tax = Sale Tax + VAT

= 2 500 + 15 375 = 17 875

Figure 13 - SSCL Tax

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 5. Leasing Payment

When the user input the lease amount, annual interest and the number of
year, we can count monthly leasing installment by using leasing formula.

Lease Payment Calculation Formula

Monthly installment = A x i / ( 1 – (1 / (1 + i )n ))

A – lease amount n – number of month

i - annual interest rate / 12

There are three categories of calculate Leasing Payments. When the user
selects the Leasing Payment category correctly, display following output related to
the category. The Leasing Payment page is given below(Figure 14) and the user
can enter an option number that he wants to execute.

Figure 14 - Leasing Payment Home Page

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 I. Calculate Monthly Installment

First, the user should enter lease amount, the annual interest rate and the
number of years. Afte user input all data, System should calculate and display the
monthly installment.

Figure 15 - Calculate Monthly Installment

System

II. Search Leasing Category

First, the user should enter the lease amount and the annual interest rate.
The system should display monthly payments of 3 years,4 years, and 5 years of
leasing plans.

Figure 16 - Search Leasing Category

System

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 III. Find the Leasing Amount

First, the user should enter the monthly lease payment amount user can pay,
the annual interest rate, and the number of years. Finally , system should calculate
the total leasing amount available from the leasing company.

Figure 17 - Find Leasing Amount

System

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 Guideline

• Refer to the Coursework Guidelines at the end to understand the specific

guidelines to be followed when developing the project required.
• Use the Scanner class to get input from the command-line interface.
• Refer demo video to understand the coursework requirement better and the
demo video may help you to clarify your doubts to some extent. ( Demo Video )
• Submission - You should attach your Java file and the video file separately with
the file name format [BatchNumber_ Name], and submit on or before the
deadline.
• If you still have any questions, feel free to question.

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