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Will the following items listed below be included in the estimation of national income?

i. Payment of income tax by a firm

ii. Contribution to provident fund by the employers

iii. Profits earned by a branch of Indian bank in abroad

iv. Interest received on debentures

Asked by Topperlearning User 15th April 2016, 2:30 PM
Answered by Expert
Answer:

i. When the income tax by a firm refers to corporate tax, it is a transfer payment made by the firm to the government. It constitutes a part of income, and hence it will not be taken into account individually in the estimation of national income.

 

ii. Contribution to provident fund by the employers is a payment made by the employers on behalf of the employees and it is included in the estimation of national income.

 

iii. Profit earned by the branch of Indian bank in abroad is included in the estimation of national income as it is the net factor income earned from the rest of the world.

 

iv. Fixed form of interest on debentures is a factor income which is included in the estimation of national income.

Answered by Expert 15th April 2016, 4:30 PM
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