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If the revenue from income tax increases from ₹ 50 crore to ₹ 100 crore during a particular year in…

Percentage increase in tax revenue \(= \frac{100 - 50}{50} \times 100 = 100\%\). Percentage increase in income \(= \frac{220 - 200}{200} \times 100 = 10\%\). Tax buoyancy…

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If the revenue from income tax increases from ₹ 50 crore to ₹ 100 crore during a particular year in which income increases from ₹ 200 crore to ₹ 220 crore, then value of buoyancy of income tax will be :

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Percentage increase in tax revenue =100−5050×100=100%= \frac{100 - 50}{50} \times 100 = 100\%. Percentage increase in income =220−200200×100=10%= \frac{220 - 200}{200} \times 100 = 10\%. Tax buoyancy =%ΔT%ΔY=100%10%=10.0= \frac{\%\Delta T}{\%\Delta Y} = \frac{100\%}{10\%} = 10.0.

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