Question

Outline the differences and similarities between the different definitions of income.

Answer 1

There are different definitions for the concept of income and it is very difficult to give a comprehensive definition for the income. Economists, Policy Makers, Tax Scholars and others use dealing with the different definitions of income for different purposes like income definition for taxes, measurement of national production, transfers, measurement of household resources, measurement of individual wealth, health care subsidies, students financial grant and loans.

Webster define income as "the gain or recurrent benifit which proceed labour, business or property". Economists defined income as the flow of goods and services for the satisfaction of humanbeing. The importent limitation of economic income is the nature of capital assets that involves and evaluation of future reciepts. Although economic income definition was very useful in the determinatiion of national income concept.

Other one is business income and its definiton deals with maintaning capital intact. However income is not a mere return of capital but its derived form the gain also. Next one is Accounting concept and according to this concept of income, they used network method for income. they considered income as the differences between owners' equity from one balance sheet date to another.