ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -A proportional tax is a type of income tax in which everyone pays the same percentage tax, regardless of their income. Low, middle, and high-income taxpayers all pay the same percentage of tax. Flat taxes are another name for proportional taxes.

Detailed explanation-2: -proportional tax-A tax that takes the same percentage of income from all income groups. regressive tax-A tax that takes a larger percentage of income from low-income groups than from high-income groups.

Detailed explanation-3: -India follows a progressive tax system. Under a progressive system, high-income earners pay more than low-income earners.

Detailed explanation-4: -Progressive and regressive tax A progressive tax is a tax where the tax rate increases with increase in the taxpayer’s income. Here, individual who get high income pay higher proportion of there income as tax. On the other hand, in the case of regressive tax, tax rate decreases with increase in income.

Detailed explanation-5: -The proportional tax rate has a constant slope, graphically, while the progressive tax rate has a rising positive slope. The steeper the slope of the tax line, the progressive the tax regime. The regressive tax rate line has a declining negative slope.