Is Expenditure on construction of a house included/excluded in national income?

Yes,

Expenditure on construction of a house will be included in the national income as it is a part of capital formation.

Explanation:-

Expenditure on the construction of a house is part of gross fixed capital formation.

It is the addition of the current stock of capital during a year. It is called gross domestic capital formation.

Domestic capital formation is added to the national income through the Expenditure Method.