2019 · Q41
Which one of the following equals Personal Disposable Income ?
General KnowledgeIndian Economy
- APersonal Income – Direct taxes paid by households and miscellaneous fees, fines, etc.
- BPrivate Income – Saving of Private Corporate Sectors – Corporation Tax
- CPrivate Income – Taxes
- DTotal expenditure of Households – Income Tax – Gifts received
Explanation
Personal Disposable Income is defined in NCERT Class 12 Economics as Personal Income minus personal tax payments (direct taxes) minus non-tax payments such as fees and fines. It is the income households actually have available for consumption and saving. Subtracting only corporate taxes, or indirect taxes, would not yield the textbook definition. Hence personal income minus personal tax payments minus non-tax payments.