The tax is levied on the income of individuals and businesses, and the rate of tax depends on the amount of income earned. Income tax is an important source of revenue for the Indian government. This research paper aims to analyze the two methods of taxation, their advantages and disadvantages, and their impact on government revenue, fairness, and incentives to work harder and earn more. The rates of income tax can be levied through two methods – a proportional rate of taxation or a progressive rate of taxation. It is a direct tax levied on the income of individuals, companies, and other entities. Income tax is one of the primary sources of revenue for governments around the world. Income tax, proportional rate of taxation, progressive rate of taxation, flat tax, tax system, tax revenue, economic growth, income inequality, government revenue, tax evasion, tax avoidance, tax rates Overall, the paper contributes to the ongoing discussions on tax policy and its implications for individuals, businesses, and governments. ![]() The paper also considers the debate on optimal tax rates and the role of taxation in promoting economic development and government revenue. However, a proportional tax system may be simpler and more conducive to economic growth, especially for countries with high levels of tax evasion and avoidance. The paper concludes that a progressive tax system is more equitable and efficient in reducing income inequality and promoting social welfare. ![]() The paper examines the theoretical basis of both types of taxation, analyzes their implementation and administration, and evaluates their economic and social impacts. This legal research paper explores the two types of rates of income tax – proportional and progressive. This article is written by Utkarsh Upadhyay of Jamia Millia of 1 st year, Intern under Legal Vidhiya
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