Multiple choice

According to the existing property tax law, if you had purchased your property 14 years ago for INR 5,00,000 your tax would be INR 12,100 a year (2 percent of INR 5,00,000 increased by 10 percent every five years); and if someone else purchased a similar property in your neighborhood for INR 30,00,000 this year, his tax would be INR 60, 000 (2 percent of INR 30,00,000). Without the existing property tax law, both you and your neighbor would pay INR 1,50, 000 a year in property taxes (5 percent of INR 30,00,000). Which of the following is the conclusion for which the author most likely is arguing in the passage above?

  1. Existing property tax law is unconstitutional because it charges an unequal property tax on properties of equal value.

  2. If existing property tax law is repealed, every property owner is likely to experience a significant hike in property taxes.

  3. By not linking property taxes with market value of the property, existing property tax law has saved property owners huge sums of money in property taxes.

  4. If existing property tax law is not repealed, properties with similar market value will continue to be taxed at different rates.

  5. Existing property tax law has benefited some property owners more than others.
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

The author asserts that whatever be the time when the property was bought, without the existing property tax law, the property tax payable would be considerably higher than what the outgo is with the law in existence. Option (2) states this very clearly. Hence option (2) is correct.

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