Question

Write detailed note on the following:

Disposable Income

Answer 1

The real amount of money that individuals and families can spend on consumption is known as disposable income.

“Disposable income is the income remaining with individuals after deduction of all taxes levied against their income and property by the government.” -Peterson

Disposable income = Personal income − Direct taxes (income tax and property tax) − Miscellaneous receipts of the government administrative departments (fees and fines paid by the individuals)