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Questions
Define a degressive tax.
Define digressive taxation.
Explain the following with examples:
Digressive tax
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Solution
- Under this system, the rate of tax increases up upto a certain limit but after that, a uniform rate is charged.
- Income tax in India is an example of a digressive tax.
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RELATED QUESTIONS
Taxes in which the rate of tax remains the same, though the tax bases changes are called ______.
Fiscal policy means public expenditure and tax policy of the government.
Match the following and select the correct option:
| Column A | Column B | ||
| (i) | Taxes imposed on income and wealth | A. | Regressive |
| (ii) | Taxes imposed on goods and services | B. | Progressive |
| (iii) | A tax system where the rate of tax decreases with increase income | C. | Direct taxes |
| (iv) | A tax system where the rate of tax increases as income increase | D. | Indirect taxes |
Define fiscal policy.
Give an example of Indirect tax.
Explain how indirect taxes can be inflationary.
How does the state fulfil the following socio-economic objective?
Reducing income inequality.
How does the state fulfil the following socio-economic objective?
Promoting industrial growth.
State two differences between income tax and commodity tax.
Explain how tax can be used as an instrument to regulate consumption and production in an economy.
