Moderate income tax rates are believed to encourage savings and:
AVoluntary disclosure of income
BSmuggling of goods abroad
CHoarding of black money
DStrikes by tax officers
Answer & Solution
Correct answer: A. Voluntary disclosure of income
1. People declare income when rates are fair.
2. Evasion falls.
3. Disclosure becomes voluntary.
_Source: NCERT Class 11 Economics, Indian Economic Development, Chapter 3, Liberalisation, Privatisation and Globalisation._
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