MANAGEMENT

Detailed explanation-1: -What is Regressive Tax. Definition: Under this system of taxation, the tax rate diminishes as the taxable amount increases. In other words, there is an inverse relationship between the tax rate and taxable income. The rate of taxation decreases as the income of taxpayers increases.

Detailed explanation-2: -Under a progressive tax system, the marginal tax rates are higher as compared to the average tax rates. Under a regressive tax system, the marginal tax rates are lower compared to the average rates of tax.

Detailed explanation-3: -Indirect taxes, such as sales and service taxes, are examples of regressive taxes because both the rich and the poor pay the same tax when buying ordinary goods and services. Other regressive taxes include: Sales Tax. Property Tax.

Detailed explanation-4: -A progressive tax is characterized by a more than proportional rise in the tax liability relative to the increase in income, and a regressive tax is characterized by a less than proportional rise in the relative burden.

Detailed explanation-5: -Indian Income tax levies tax on individual taxpayers on the basis of a slab system. Slab system means different tax rates are prescribed for different ranges of income. It means the tax rates keep increasing with an increase in the income of the taxpayer.