Giving reasons, explain the treatment assigned to the following while estimating National Income:
(i) Payment of income tax by a firm.
(ii) Festival gift to employees.
(i) Income tax by a firm implies corporate tax. It is a transfer payment by the firm to the government. It is paid out of income and therefore, not to be separately added in the estimation of National Income.
(ii) Festival gift to employees is not included in the estimation of National Income because this is a transfer payment.