- Income tax is a direct tax. - Progressive taxation aligns with the 'ability to pay' principle. - High tax rates can incentivize evasion and black money.
Which of the following two statements is/ are correct ? a. The Income Tax is based on the principle of 'ability to pay'. b. High rates of Income Tax were an important reason for evasion thereof and rise of black money.
Asked in MPSC CS Prelims 2016 · Topic: Fiscal Policy & Revenue (Taxation System in India: Direct, Indirect taxes, and Tax Reforms (including GST))
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