Which one of the following represents a progressive tax structure?

A progressive tax structure is defined by a system where the tax rate increases as the amount subject to taxation or the individual's income increases [2]. This mechanism ensures that the real burden of tax is higher for the wealthy and lower for the poor, aiming for vertical equity and redistribution of wealth [4]. In contrast, a proportional tax maintains a constant rate regardless of income level [2], while a regressive tax is one where the tax rate effectively decreases as income rises, placing a disproportionate burden on lower-income earners [6]. Progressive taxation is commonly implemented through graduated income tax brackets, where higher income levels are subjected to higher percentage rates. This structure serves as an automatic stabilizer in the economy by reducing consumer spending during periods of high income growth [5].

Sources

1. [1] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > TAX REVENUE > p. 85
2. [2] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 4: Government Budgeting > Taxes can be classified in several ways: > p. 166
3. [4] Macroeconomics (NCERT class XII 2025 ed.) > Chapter 5: Government Budget and the Economy > 5.1.2 Classification of Receipts > p. 68
4. [6] https://www.investopedia.com/terms/p/progressivetax.asp
5. [3] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 5: Indian Tax Structure and Public Finance > Fiscal Drag > p. 117
6. [5] Macroeconomics (NCERT class XII 2025 ed.) > Chapter 5: Government Budget and the Economy > EXAMPLE 5.2 > p. 77