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

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Rationalisation of Personal Income Taxation

M P Chitale If the tax structure helps to draw out from the higher levels of income an increasing amount of savings which could be deployed for investment, the pressure to create additional money supply, and therefore inflationary tendencies in the economy, will be correspondingly less. An attempt is made here to suggest a reshaping of personal income taxation with the objective of encouraging savings. While the suggested scheme of taxation may not reduce inequality of post-tax incomes, it will certainly help reduce inequality of consumption.

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