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Differentiate between progressive taxation and proportional taxation. - Economic Applications

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प्रश्न

Differentiate between progressive taxation and proportional taxation.

Distinguish between proportional and progressive taxation

Distinguish between proportional and progressive taxation. Give examples.

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उत्तर

Progressive Taxation Proportional Taxation
When the rate of tax rises as the taxpayer's income rises, the tax is said to be progressive. A proportionate tax is one in which the tax rate remains constant regardless of income fluctuations.
High-income groups are taxed more heavily under this system, and vice versa. This method of taxation applies the same percentage of tax to all income classes.
Examples:
Flat income tax of 10% across all income levels.
Examples:
Income tax where 10% is charged on income up to ₹ 5 lakhs, 20% on ₹ 5-10 lakhs, and 30% above ₹ 10 lakhs.
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अध्याय 10: Public Revenue - Exercise [पृष्ठ १७५]

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