ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

Pawan K AggarwalSubscribe to Pawan K Aggarwal

Income Inequality and Elasticity of Personal Income Tax

Income Inequality and Elasticity of Personal Income Tax Pawan K Aggarwal This paper develops a technique for estimating the effect of a change in inequality in the distribution of income on the yield of personal income tax. The technique is applied to estimate the effect of income inequality on the yield of personal income tax in India. It is found that, for a given tax schedule, an increase (decrease) in inequality in the distribution of income among the taxpayers increases (decreases) yield of personal income tax in India. Further, the study brings out that in India, during 1966-67 to 1983-84, inequality in taxable income was marked by a declining trend, and this had substantial negative impact on elasticity of the tax. Had the inequality remained unchanged, elasticity of the tax with respect to gross domestic product would have been around 149 instead

Exemption Limit and Personal Income Tax

Exemption Limit and Personal Income Tax Pulin B Nayak Pawan K Aggarwal R H DHOLAKIA (EPW, November 25, 1989) has sharply criticised our paper published in the EPW of July 8, 1989. He raises questions that have to do with (i) the methodology of our study, (ii) choice of the sample, (iii) composition of the sample, (iv) low R2 of the regression equations, and (v) the exclusion in the analysis of other indicators such as the extent of inequality of personal income in the economy.

Exemption Limit and Personal Income Tax-An International Comparison

An International Comparison Pulin B Nayak Pawan K Aggarwal This paper analyses the relationship between the exemption limit in personal income tax and per capita income for a group of 26 selected countries. Two alternative kinds of exemption limit are examined, viz, the actual exemption limit and the notional exemption limit, where the latter is defined to be the income level at which the marginal rate of 25 per cent becomes applicable. Norms for both the actual and notional exemption limits are devised using a determinants analysis on the basis of per capita income and the share of personal income tax in total revenue. It is seen that the actual exemption limit and the marginal tax rates at low levels of income are high in India, Pakistan, Jamaica and Spain and low in the US and Thailand.
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