The Personal Income of the households of a country is Rs 900 crore. They pay income tax of Rs 120 crore and fines of Rs 15 crore. Their Personal Disposable Income is:
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Rs 765 crore
Given:
Personal Income = Rs 900 crore
Income tax (personal tax payment) = Rs 120 crore
Fines (non-tax payment) = Rs 15 crore
Personal Disposable Income = PI − Personal tax payments − Non-tax payments.
PDI = 900 − 120 − 15 = Rs 765 crore
NCERT (2026-27): “2.3 Some Macroeconomic Identities … However, even PI is not the income over which the households have complete say. They have to pay taxes from PI. 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. Personal Disposable Income is the part of the aggregate income which belongs to the households. They may decide to consume a part of it, and save the rest. …” |