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Revenue receipts and Capital receipts

Elucidate the basis of categorizing government receipts into revenue receipts and capital receipts.

Answer: Revenue Receipts: The government revenue receipts are such receipts

A) that neither makes liability
B) Nor decreases assets of the government example: Taxes, Non-Tax Revenue

Capital Receipts: Capital Receipts refer to such receipts of the government that

A) Tend to make a liability or
B) Causes decrease in its assets of the government. Example: Borrowings, Income from Disinvestment

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