Understanding Progressive Tax

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Understanding Progressive Tax
Understanding Progressive Tax

India follows a progressive tax regime. Progressive tax system means that high-income earners are taxed more than low-income ones.

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The extent of the progressivity in this tax method depends on how fast the tax rates rise with the increase in income levels. For example, if one tax bracket has a low rate of 5% and a high rate of 30%, and another tax bracket has income tax rates ranging from 5% to 60%, the latter is the more progressive.

The following income tax slabs (fiscal year 2017-18) are used in India:

  • for salary earners below 60 years:
Annual IncomeTax Rate
Up to Rs.2,50,000Nil
Rs.2,50,001-Rs.5,00,0005%
Rs.5,00,001-Rs.10,00,00020%
Above Rs.10,00,00030%
  • for income earners between 60 years and 80 years:
Annual IncomeTax Rate
Up to Rs.3,00,000Nil
Rs.3,00,001-Rs.5,00,0005%
Rs.5,00,001-Rs.10,00,00020%
Above Rs.10,00,00030%
  • for income earners between 80 years and over
Annual IncomeTax Rate
Up to Rs.5,00,000Nil
Rs.3,00,001-Rs.5,00,0005%
Rs.5,00,001-Rs.10,00,00020%
Above Rs.10,00,00030%

 

You can find more information on topics like e filing, income tax, refund status, etc. on our blog.

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Why Progressive Tax?

The need of such a tax structure arises due to unevenness in the distribution of income among masses. Last year, only 24 lakh taxpayers out of around 6 crores earned more than Rs 10 lakh in India.

If there were a flat tax rate, the rest of the taxpayers would be charged relatively a lot more in comparison to the super-rich people. Progressive tax systems, thus, reduce tax burdens on the people who find it the most difficult to pay them.

The premise here is that the ones with privilege should pay more. This system has the ability to gather more taxes than flat taxes or regressive taxes, as tax rates are set to increase as income rises. Progressive taxes allow people with large amount of resources to fund a big part of the services all people and businesses rely on, such as roads, hospitals, schools, etc.

On the contrary, critics of progressive taxes consider them as biased against rich people. These critics believe this tax is primarily a means of income redistribution, based on the myth that most taxes fund welfare programs. Although, this is not true. The government usually spends only a small portion on social welfare.

You don’t have to be a math genius to do your taxes! You can easily hire a tax expert. We, at AllIndiaITR, guarantee you the best rates in the market for highly professional financial services like income tax efiling, income tax return, income tax refund, income tax calculator, etc.

Our online platform is owned and operated by Corwhite Solutions Private Limited.

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5 COMMENTS

  1. Great work by ITR team it really nice to explaing everything about taxes.
    Thnx for this this really help me alot.This blog is really helpfull for us to know more about progressive tax. This tell us everything that we should know about progressive tax. This is like a algorithm to fill taxes becaute it tell us step by step how we should fill taxes and yes it is also easy to understand. It tell breifly and accurately about taxes. The best thing about this blog is that we can get every information hear only. we shoud not go on different side to search about itr. It’s really great that u take initiative to tell people about this and your way of representation of thought is really good.We can understand out problem very easily and get our answers faster.Great keep it up.

  2. Excellent work by ITR.This blog conatins details in breifly and accurate manner about Progressive Tax.
    Great work by ITR team it really nice to explaing everything about taxes. It touches each and every corner of tax and its related branches in a neat and alligned manner.
    None of the tax or investment blogs or websites provide such detailed describtion about “Progressive Tax “.
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    The most attractive thing is that table content which describes income tax slabs (fiscal year 2017-18) used in India really helps me alot .
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  3. Excellent team work by All India ITR. This blog is really helpful for us to know more about progressive-tax.It tell briefly and accurately about progressive-tax. Great work by All-India-ITR team it really nice to explaining everything about progressive-tax. I found this blog to be really helpful to know more about progressive-tax.these simple words will be helpful for each and every person to go through it.This tell us everything that we should know about progressive-tax. The best thing about this blog is that we can get every information hear about progressive-tax. we should not go on different side to search about progressive-tax. It’s really great that u take initiative to tell people about this and your way of representation of thought is really good.We can understand out problem very easily and get our answers faster. Thanks for this this really help me alot.

  4. Thank you for such an amazing information providing to us in a simple manner and step by step guidence, Now I now why progressive tax is important so much and how its really works can you tell us that how we can control our progressive taxes in what ways?

  5. A very well written blog has really helped me alot. This really helps and tells a process that is required to fill up an Income tax return. This blog tell us step by step how we should fill taxes and yes it is also easy to understand. Each and every details have been mentioned in simple and clear language.
    i would prefer anyone to have a eye on it to clear all their doubts. The best thing about this blog is that we can get every information hear only. we shoud not go on different side to search about itr. Great work keep it up.It tell breifly and accurately about taxes. The blog is very detailed and the way it explains us about the tds and its importance is what alot of people dont know about, every thing is very easy to understand and to retain it really helps a person on how to fill up the ITR and how to enquire about it. Great work from ALL INDIA ITR since it is a very well written and a very useful blog. I have one question though if India follows the progressive tax method then why the tax slab percentage is same on all the three categories why do they tax from the last group or the very senior citizens??

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