Which of the following will be included in the National Income of India?
(A) Donations given to a religious institution.
(B) Payment of Income Tax
(C) Scholarship given to students
(D) Profits earned by an Indian company from its branch in France
(E) Purchase of a television set by a consumer household
Choose the correct answer from the options given below :
Answer & explanation
Correct answer: option 3
The correct answer is Option 3:(D) and (E) Only
National Income of India refers to the total income earned by residents of India in a particular period. It includes income from all sources, both domestic and foreign.
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Donations given to a religious institution: These are considered transfers and not income, hence they are not included in the National Income.
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Payment of Income Tax: Income tax is a deduction from income, not a part of income. Hence, it is not included in the National Income.
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Scholarship given to students: Scholarships are considered transfers and not income, hence they are not included in the National Income.
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Profits earned by an Indian company from its branch in France: This income is earned by an Indian resident, irrespective of the geographical location of its source. Hence, it is included in the National Income.
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Purchase of a television set by a consumer household: Included. This is a part of Private Final Consumption Expenditure (PFCE). It represents the purchase of a final good produced in the economy, which is a core component of calculating National Income using the Expenditure Method.