AIR 8 · CSE 2025 · GS3 · 62 pages

Pakshal Secretry: GS3 answer copy

20 answers by Pakshal Secretry, as written in the test. Each question opens a page with how other toppers answered it.

The questions

The answers

Question 1 · 10 marks · 133 words written

How far do you think the recent proposals to reform India's tax structure will help in improving India's tax buoyancy and base?

Opening · a date or context

In Budget 2025-26, government has decided to reform India's tax Structure and also brought in New Income Tax Bill 2025.

Body · points and prose

Diagram
Recent proposal - Income tax for upto Rs 12.75 lakh income - Reform in Tax slabs & structure - Simplified Provision under New IT Act, 2025

Role in Improving Buoyancy

  1. Laffer curve → low Tax burden will improve buoyancy
Diagram
[Laffer curve] Tax Revenue ^ A' | / \ | / \ A | / \ +----------------> Tax Rate Now Part
  1. Consumption and demand side boost due to higher dispoble income → ↑ buoyancy

On Tax Base

(3) Less burden of Tax → ↑ compliance among tax payer (4) Lower incentive to cheat and go for tax evasion among corporates (5) Government projection

Diagram
* Government projection * Tax base → 11 crore expected this year * Tax Buoyancy → 1.3 in FY26

Other side (1) Projected loss of revenue → Rs 1 lakh crore (due to lowering of rates) (2) Structural issue persist:

  • eg inverted duty structure (3) Removal of exemption on investment given by government → less buoyancy

Close · a quotation

As Adam Smith says, we must follow 3 canons of taxation → Canon of equity, certainty and buoyancy