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Question : 9
Total: 19
How are capital receipts different from revenue receipts? Discuss briefly.
Solution:
Basis | Capital Receipt | Revenues Receipt |
---|---|---|
(i) Meaning | These are those receipt of government which either lead to increase in its liabilities or reduction in its assets. | Revenue receipt neither create any liability nor reduce any asset of the government. |
(ii) Nature | They are irregular and non-recurring in nature. | These receipts are regular and recurring in nature. |
(iii) Obligation | There can be future obligation to return the amount along with interest in certain capital receipts like borrowing. | There is no future obligation to return the amount received. |
(iv) Examples | Borrowings, receipt from disinvestment etc. | Income tax, Profit of PSU, dividends, fee and fine etc. |
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