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Question : Which of the following taxes is proportional in nature?

Option 1: Capital Gains Tax

Option 2: Income Tax

Option 3: Corporation Tax

Option 4: Goods and Services Tax


Team Careers360 20th Jan, 2024
Answer (1)
Team Careers360 23rd Jan, 2024

Correct Answer: Goods and Services Tax


Solution : The correct answer is Goods and Services Tax .

Indirect taxes are mostly "Proportional" in nature, which means that the tax is levied at a fixed rate as a percentage of the tax base, irrespective of the size of the tax base. On the other hand, direct taxes are progressive, which means that the tax rate increases as the taxable income increases. Goods and Services Tax is an example of a proportional tax since it is an indirect tax.

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