Which of the following will not be included in the National income of India?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Profits earned by a foreign company in India.
National Income includes income generated within the domestic economy, typically by residents of the country. Here's an explanation for each option:
-
Profits earned by an Indian resident from his company abroad: This income is earned by an Indian resident and would be included in India's national income.
-
Salaries earned by Indian residents working in Japan: Salaries earned by Indian residents, even if earned abroad, are included in the national income of their home country, India in this case.
-
Profits earned by a foreign company in India: This income is earned by a foreign entity (company) operating within India. It does not contribute to India's national income but is part of the foreign company's income.
-
Dividends received by Indian shareholders of a company: Dividends received by Indian shareholders from a company, whether domestic or foreign, are included in India's national income.