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Will the following factor income be included in domestic factor income of India? Give reasons for your answer:- (i) Compensation of employees to the resident of Japan working in Indian embassy in Japan. (ii) Payment of fees to a Chartered Accountant by a firm (iii) Rent received by an Indian resident from Russian embassy in India. (iv) Compensation given by insurance company to an injured worker. |
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Answer» (i) Yes it will be included as its part of Factor Income earned in domestic territory of the country. (ii) Payment of fees to a Chartered Accountant is an intermediate expenditure for the firm. Hence it is to be deducted from the value of output of the firm to obtain value added. Hence it is not included in domestic factor income of India (iii) No, as rent received be Indian resident from Russian embassy will be part of Fcator Income received from abroad as Russian Embassy is not part of domestic territory of the country. (iv) No, as compensation is given by insurance company to employee and not by employer. |
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