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Questions
Under ______ the rate of tax increases with rise in tax payer's income.
Identify which of the following option is correct?
Under ______ the rate of tax increases with rise in tax payer's income.
Options
Progressive taxation
Proportional taxation
Regressive taxation
Digressive taxation
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Solution
Under Progressive taxation the rate of tax increases with rise in tax payer's income.
Explanation:
- Under progressive taxation, the rate of tax increases as the taxpayer's income rises.
- This means that individuals with higher incomes pay a higher percentage of their income in taxes, which is designed to reduce income inequality and ensure that those who have the ability to pay more do so.
RELATED QUESTIONS
The following table indicates:
| Tax Base in ₹ | Rate of tax in % |
| 10,000 | 8 |
| 20,000 | 8 |
| 30,000 | 8 |
| 40,000 | 8 |
Name any two instruments of Fiscal Policy.
Define direct tax
State the difference between income tax and expenditure tax.
To which tax is this shifting of tax burden relevant?
Give an example of Indirect tax.
Draw a neat labelled diagram for progressive taxation.
Discuss four fiscal policy objectives with reference to India.
Define the following term:
Fiscal deficit
Citing reasons state the superiority of Fostering civic consciousness by direct tax over the same by indirect tax.
