Identify true statement from the following about income method of National Income Accounting :-

A. Income method includes retirement pension

B. Income method includes donations received

C. Income method include old age pension

D. Income method includes social security contribution made by employer

Choose the correct answer from the options given below :

D only

The correct answer is option (3) : D only

A. Income method includes retirement pension - Retirement pension is a transfer payment. Transfer payments are payments which are made without any counterpart of services received by the payer. For examples, gifts, scholarships, pensions. are like a deferred wage. While calculating national income, only factor revenues received from rendering productive services are considered. All forms of transfer income, such as old-age pensions, unemployment benefits, and so on, are excluded.

B. Income method includes donations received - Donations are also transfer payments and do not constitute income from production of goods and services.

C. Income method includes old age pension - Similar to retirement pensions, old age pensions are transfer payments and are not included.

D. Income method includes social security contribution made by employer - Social security contributions (like Employer's contribution to Provident Fund etc) made by the employer are indeed part of compensation to employees for their productive services and are included in national income.