Read the passage and answer the following questions:
In India's fiscal architecture, taxation constitutes a cardinal instrument for resource mobilisation and equitable wealth distribution. Broadly bifurcated into direct and indirect levies, the system encompasses a complex interplay of statutory provisions, administrative machinery, and compliance frameworks.
Direct taxes, exemplified by income tax and corporate tax, are levied directly on individuals or entities based on their earnings or profits. These imposts embody the principle of progressive taxation, wherein higher income brackets attract proportionately higher rates, ostensibly promoting distributive justice.
Indirect taxes, conversely, are imposed on goods and services, with the burden ultimately borne by the end consumer. The advent of the Goods and Services Tax (GST) in 2017 subsumed a plethora of erstwhile levies such as excise duty, service tax, and value-added tax, creating a unified national market. While GST has streamlined compliance and reduced cascading effects, debates persist regarding its impact on small enterprises and revenue buoyancy.
In addition, India imposes ancillary duties such as customs duty on imports, intended both to generate revenue and to protect domestic industries. The overall tax regime, though intricate, is pivotal for financing public infrastructure, social welfare programmes, and defence expenditure, thereby underpinning the nation's developmental trajectory.
The clause 'wherein higher income brackets attract proportionately higher rates' is:
Show answer & explanation
Correct answer: B
Explanation
The clause 'wherein higher income brackets attract proportionately higher rates' modifies the noun phrase 'the principle of progressive taxation' by providing more information about it, specifically where or in what situation this principle applies. It acts like an adjective, describing the principle.