Q.Using the income method, calculate National Income from: Compensation of employees = ₹3,000 crore; Rent = ₹500 crore; Interest = ₹400 crore; Profit = ₹1,100 crore; Net factor income from abroad = ₹100 crore. (There are no other items.)

The income method sums the four factor incomes to get domestic income, then adds net factor income from abroad to reach national income.

Given factor incomes (₹ crore): Compensation of employees $= 3{,}000$, Rent $= 500$, Interest $= 400$, Profit $= 1{,}100$; and $NFIA = 100$.

Step 1 — Sum the domestic factor incomes to get Net Domestic Product at factor cost.

Step 2 — Add net factor income from abroad to reach national income.

$NI = NDP_{FC} + NFIA = 5{,}000 + 100 = 5{,}100 \text{ crore}$ …

A classic mistake is to also add transfer payments (like pensions or scholarships) if they appear in the data — these must be excluded, since they are not paymen …