Taxes which are imposed on individuals, such as income tax, are deducted from Personal Income as:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Personal tax payments
Income tax and other taxes on individuals are personal tax payments. They are deducted from personal income to get personal disposable income.
NCERT (2026-27): Glossary: “Personal tax payments – Taxes which are imposed on individuals, such as income tax.” “2.3 Some Macroeconomic Identities … If we deduct the Personal Tax Payments (income tax, for example) and Non-tax Payments (such as fines) from PI, we obtain what is known as the Personal Disposable Income. Thus Personal Disposable Income (PDI ) ≡ PI – Personal tax payments – Non-tax payments. …” |