What is considered an example of active income?

Active income refers to the earnings generated from activities in which an individual actively participates, typically involving work or a service provided. Salary is a prime example of active income because it is compensation received for labor performed, where the individual is directly engaged in the work.

This type of income is typically earned on a consistent, recurring basis, such as through a job or a business in which one actively engages. It contrasts with passive income, which comes from investments or other income sources where the individual is not directly involved in the earning process.

The other options represent forms of income that do not require active participation. Investment returns, rental income, and interest income can be categorized as passive because they are usually generated from investments or assets without the need for the holder to engage in direct work related to those earnings.