Flat tax

Flat Tax A Flat Tax is a tax system in which all taxpayers pay the same fixed rate on their income, regardless of the level of earnings. Unlike progressive tax systems, where higher incomes are taxed at higher rates, a flat tax applies a uniform rate to all income, often simplifying the tax code by reducing or eliminating deductions, exemptions, and credits. The main advantages of a flat tax include simplicity, transparency, and ease of compliance, but critics argue that it may place a higher relative burden on lower-income earners compared to progressive taxation.

Example: If a country implements a flat tax rate of 15%, an individual earning ₹5 lakh pays ₹75,000 in tax, while someone earning ₹50 lakh pays ₹7.5 lakh. Both pay the same proportion of income, even though their absolute tax amounts differ