Fines paid by households to the government are deducted from Personal Income as:
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Non-tax payments
Payments households make to the government that are not taxes, such as fines, are non-tax payments. With personal tax payments, they are deducted from personal income to get personal disposable income.
NCERT (2026-27): Glossary: “Non-tax payments – Payments made by households to the firms or the government as non-tax obligations such as fines.” “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. …” |