ForumIAS announcing GS Foundation Program for UPSC CSE 2025-26 from 26th June. Click Here for more information.
Personal Income is the part of National Income which is received by the households.
The formula for calculating Personal Income (PI) is
Personal income (PI) ≡ National Income – Undistributed profits(profits utilised by manufacturers for further production) – Net interest payments made by households – Corporate tax + Transfer payments to the households from the government and firms(old-age pensions, unemployment compensation, relief payment etc.).
Note
- Undistributed profits – these are the profits which is not distributed to the households
- Corporate Tax – It also does not accrue to the households
