Free essay on the Role of Black Money in National Income. The very concept of black money has undergone a great change. In 1950s and early 60s evasion of income tax by big industrialists and businessmen was considered the source of black money.
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The family income includes all the goods and services from various sources such as salaries of the members of the family, income from land or other immovable property owned by the family.
Statistical statements relating to these aspects and aggregates of national income are known as National Income Accounts. These accounts are maintained in the form of double entry system.
National income accounting is a method or format of presenting and preparing national income statistics. National Income accounting adopts the principles of business accounting for the estimation of National Income.
The following precautions should be taken while calculating national income using income method: (i) All kinds of transfer payments are not to be included in the national income. This is so because these are unilateral payments. (ii) The value of the output kept for self-consumption and the imputed rent of the self-occupied house are included […]
The difference of export and import of goods and services is a part of domestic income. Here services mean non-factor services like banking, shipping, insurances etc. These services are different from the factors services such as labour, capital, etc.
National income is an earning concept whereas personal income is a receiving concept. National income signifies what is earned by the normal residents of a country whereas personal income signifies what factors actually get whether they earn it or do not earn it.
Generally, there are three components of Domestic factor Income. There are: (i) Compensation of employees (ii) Operating surplus (iii) Mixed income of the self-employed.
National income is the income generated by factors of production. But personal income is the income received by factors of production. So personal income is a receipt concept.
Distribution refers to that branch of Economics, which analyses how the national income of community is divided among the various factors of production. This is known as functional or factor distribution. On the other hand, division of national income among individuals of a country is called personal distribution.