Following are the necessary precautions while using value added method of measuring National Income:
(i) Avoid double counting, by considering only the final goods.
(ii) Sale of second hand goods should not be considered.
(iii) Production for self-consumption (like the farmer’s family using their own farm output) must be considered.
(iv) Value addition should include imputed rent on owner occupied houses, because imputed rent is taken as a part of factor income and factor income has got to be identical with value added.