ECONOMICS (CBSE/UGC NET)

Detailed explanation-1: -Disposable income, also known as disposable personal income (DPI), is nothing but your residual take-home salary left after discharging all your income tax obligations. Basically, it is that portion of your personal income that you have complete freedom or control over.

Detailed explanation-2: -The term “disposable income” is used to describe the amount of money left over after taxes have been taken out of a person’s or family’s earnings. Discretionary income, on the other hand, is what’s left after a person pays their taxes and their fixed costs like housing, food, and clothing.

Detailed explanation-3: -Very simply, disposable income is money you have after taking out/paying your taxes. Discretionary income is money left over after paying your taxes and other living expenses (rent, mortgage, food, heat, electric, clothing, etc.). Discretionary income is based on and derived from your disposable income.

Detailed explanation-4: -A discretionary expense is a non-essential expense that is incurred by an individual, household, or business. Another way to think of discretionary expenses is to classify them as “wants” instead of “needs.”

Detailed explanation-5: -Discretionary income is the amount of an individual’s income that is left for spending, investing, or saving after paying taxes and paying for personal necessities, such as food, shelter, and clothing. Discretionary income includes money spent on luxury items, vacations, and nonessential goods and services.