Q. With reference to Progressive and Regressive Tax Policies, consider the following statements:
1.Progressive tax policies impose higher tax rates as income increases, thereby benefiting lower income groups.
2.Regressive tax policies apply the same tax rate to everyone, which ends up benefiting higher income groups more.
3.In India, Personal Income Tax is considered regressive, while GST is progressive in nature.
Which of the statements given above is/are correct?
Answer: A
Notes:
Explanation:
- Progressive taxes increase with income, supporting equity.
- Flat tax rates mean the poor pay a larger share of their income, benefiting the rich.
- In India, Personal Income Tax is progressive and GST is regressive, not the other way around.
Source: Indian Economy (N.C.E.R.T)
