Question

How are taxes levied in India?

Answer 1

Taxes are levied by the Government progressively, proportionately as well as Regressively.

1. Progressive Tax: Progressive Tax rate is one in which the rate of tax increase as the tax base increases. When income increases, the tax rate also increases. This is known as a progressive tax

Tax Base	Tax Rate	Amount of Tax
10,000	10%	1000
20,000	15%	3000
30,000	25%	7500

Proportional Tax: Tax levied on goods and services in fixed portions is known as proportionate taxes. Tax amount varies in the same proportion to that of Income.

Tax Base	Tax Rate	Amount of Tax
10,000	10%	1000
20,000	10%	2000
30,000	10%	3000

Regressive Tax: It implies that the higher the rate of tax, the lower the income groups than in the case of higher-income groups.

That is, tax is levied uniformly at a flat percentage regardless of who the purchaser or owner Eg: Sales Tax, Property Tax.