Question

Explain ‘mixed-income of self-employed’ and give an example.

Answer 1

Mixed income of self-employed refers to the total earnings of a business owner, professional, or family-run firm that combines three sources:

1. Wages (for their own labour).
2. Rent (for their own property/premises).
3. Interest (for their own capital invested).

Since these are usually earned as one lump sum and cannot be easily separated, they are collectively termed “mixed-income.”

Example: A farmer who owns their own land and works on it. Their income is a mix of wages for their hard work, the rent from their land, and interest on the money invested in seeds and equipment.