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Question
Explain the term proportional taxation.
Answer in Brief
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Solution
- Under the proportional tax system, all incomes are taxed at a uniform rate.
- In other words, a proportional tax (also referred to as a flat tax) is one in which the rate of tax remains the same.
- Corporation tax is an example of proportional tax in India where the government charges a flat rate of 30% on the income earned by the companies.
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RELATED QUESTIONS
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 |
The major objective of monetary policy is ______.
Name any two instruments of Fiscal Policy.
State two objectives of fiscal policy.
Citing reason state the advantage of a progressive tax over proportional tax.
Classify the following type of tax into direct and indirect taxes:
Entertainment tax
How does the state fulfil the following socio-economic objective?
Reducing income inequality.
Three demerits of an Indirect tax.
Explain the term Impact of a tax.
Explain the significance of taxes.
