Why were income tax rates reduced after 1991?
ATo raise consumer prices
BTo cut exports of goods
CTo punish regular savers
DHigh rates caused tax evasion
Answer & Solution
Correct answer: D. High rates caused tax evasion
1. Very high rates drove people to hide income.
2. Lower rates bring voluntary disclosure.
3. So rates were cut.
_Source: NCERT Class 11 Economics, Indian Economic Development, Chapter 3, Liberalisation, Privatisation and Globalisation._
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