What is meant by Personal Disposable Income (PDI)?

 Personal Disposable Income. It is that part of personal income which is available to the households for disposal (or spending) as they like. Disposable income refers to income actually available for use as consumption expenditure and savings. Thus it is the income which remains with individuals after deduction of taxes, fees and miscellaneous receipts of the government. In other words, it is the income which the households can spend on consumption or can save as they please. Since households utilise personal disposable income for personal expenditure and personal savings, therefore, PDI is also equal to personal expenditure + personal savings. Personal disposable income can be arrived at by deducting personal taxes (like income tax, property tax, fire tax, etc.) and other miscellaneous items (like fines, fees, etc. received by Govt, administrative deptt.) from personal income. Thus:
Personal Disposable Income = Personal Income - Personal Taxes - Miscellaneous Receipts of the Govt.
This can be further clarified with the help of an example. Suppose annual income of an individual is र 50,000 and the income (direct) tax levied on him is र 5,000. His personal disposable income will be र 45,000 (50,000 - 5,000) which is at his disposal to use it for personal consumption or for saving.