The Influence of Taxation on Income Inequality: An Analysis of Sensitizing and pushing Tax Policy to address Economic Growth

This study examines the effectiveness of India's income tax system in reducing economic disparity, with an emphasis on taxpayer viewpoints. Despite India's ever-expanding economy, there is a vast difference between wealthy earners and those at lower income margins. The study focuses on the progressive character of India's income tax system, which imposes higher tax rates on higher income levels to achieve better equity and fairness. It also looks into how tax revenue is used to fund social welfare programs that aim to improve the economic conditions of lower-income groups, thereby bridging the income inequality gap. Furthermore, the study examines public perceptions of whether the tax system is fair and prosperous in creating equality. The study offers an overview of the income tax system's effectiveness as a strategy for creating greater income equality in India. By combining taxpayer opinions with examining tax policy and welfare outcomes, the study provides significant insights into the current system's impact, needs, limitations, and prospective areas for reform. Finally, the study aims to provide clear insights into how effectively the income tax system reduces income inequality and makes India's society more equitable. The study identifies critical elements influencing taxpayers' attitudes, such as tax awareness, Government role, and tax regime. Notably, taxpayers with better tax knowledge are more inclined to support progressive taxation and see income taxes as a valuable tool for addressing income disparity. Understanding taxpayers' opinions allows tax authorities and policymakers to develop more effective tax solutions to minimize income inequality and support economic growth.