Personal Income Tax in India-Alternative Structures and Their Redistributive Effects

Quite apart from its role of raising revenue, the personal income tax has long been regarded as a potent weapon of effecting distributive justice. This paper examines, first, the structure of personal income tax in India to check the extent of progressivity inherent in its structure and, second, the redistributive effects of alternate income tax schedules that are (i) simpler in their structure, (ii) earn no less aggregate revenue, and (iii) are in consonance with the current thinking on taxation, in that the top marginal tax rates arc not too high.