What is slab rate?

Answer 1

Slab rate refers to a system of taxation where different portions of income are taxed at varying rates, known as tax slabs. For instance, an individual may pay a lower percentage on their initial income up to a certain threshold and progressively higher rates as their income increases. This structure is designed to ensure that taxpayers contribute fairly according to their ability to pay. Slab rates are commonly used in income tax systems across various countries.