Multiple choice

High rates of income tax encourage tax evasion and burgeoning black money. Which of the following is incorrect? (a) Income tax is progressive in India. (b) There has been spurt in tax rates. (c) People resort to under declaration of income.

  1. Only (a)

  2. Only (b)

  3. Only (c)

  4. None of these
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Income tax rate structure is progressive in India, i.e. rate of tax is not uniform. With a view to avoid tax, people tend to suppress their income. That is why there has been reduction in tax rates during the last two decades.

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