The various steps for calculating national income through income method are:  

Step 1: Identify and classify the production units:  

All the producing enterprises employing various factors of production are identified and classified into primary secondary and tertiary sectors.  

Step 2: Estimate the factor income paid by each sector:  

The factor incomes paid by each sector are classified under the following heads:  

(i) Compensation of employees; 

(ii) Rent and Royalty; 

(iii) Interest; 

(iv) Profit; and 

(v) Mixed Income.  

Step 3: Calculate Domestic Income (NDPFC):  

When factor incomes of all the sectors are summed up, we get domestic income (NDP_FC). In short, NDP_FC = Compensation of Employees + Rent and Royalty + Interest + Profit + Mixed Income  

Step 4: Estimate net factor income from abroad (NFIA) to arrive at National Income:  

In the final step, NFIA is added to domestic income to arrive at National Income (NNP_FC), i.e. NNP_Fc = NDP_Fc + Net factor income from abroad.