2.10. Personal Income (PI)

Personal income includes all income which is received by all the individuals in a year. It also includes transfer payments such as LPG subsidy. The welfare payments are received by households, but they are not elements of national income because they are transfer payments.

Similarly, in national income accounting, some income is attributed to individuals, which they do not actually receive such as undistributed profits, employee’s contribution for social security, corporate income taxes etc. These are part of national income but are not received by individuals. Therefore, they are to be deducted from national income to estimate the personal income. Thus Personal income is: