Question

Q1: What is “Income” according to Income Tax Act and discuss Progressive and Regressive systems of

taxation.

Answer 1

Income according to income Tax act means that all such income which have been earned by individual in the previous year from different sources like salaries, capital gains, business and profession other sources, are needed to being reported to the tax department in order to pay tax on the required income.

Progressive income tax is a tax regime in which as the earning of the individual grows, the tax rate simultaneously grows, so it is a tax on increased income

Regressive income Tax regime is one in which even if the earning of the individual goes down, the income tax goes up, so it is like a regressive technique of charging higher rate from those persons whose income are down.