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How is India’s personal income tax on ordinary slab-rated income classified under the default regime in…

Personal income tax is a direct tax assessed on the taxpayer’s income. Section 202 provides graduated marginal rates for ordinary slab-rated income under the default regime.

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How is India’s personal income tax on ordinary slab-rated income classified under the default regime in section 202 of the Income-tax Act, 2025?

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Answer and explanation

Correct answer C

Personal income tax is a direct tax assessed on the taxpayer’s income.

Section 202 provides graduated marginal rates for ordinary slab-rated income under the default regime.

Option feedback

Option A

It is a direct tax, but the marginal rates rise across the ordinary income slabs, so the schedule is progressive.

Option B

The schedule is progressive, but the tax is assessed on the taxpayer’s income, which makes it direct.

Option C

It is assessed on the taxpayer’s income and applies higher marginal rates to higher ordinary income slabs.

Option D

The tax is direct and its ordinary slab schedule is progressive, so neither classification in this choice fits.

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