Question

Which of these is NOT a part of capital receipt?
1. Recovery of loan 
2. Disinvestment
3. Borrowing
4. Tax

Answer 1

Correct Answer - Option 4 : Tax

The correct answer is Tax.

• Capital receipts are the cash received from the sale of fixed assets, cash received from the sale of company shares, and cash received through the issue of a debt instrument, such as loans and bonds.
• Capital receipts are government revenues that either (i) generate liabilities (e.g. borrowing) or (ii) reduce assets (e.g. disinvestment).
• A capital receipt occurs when the government raises funds by incurring liability or selling its assets.
• Revenue receipts are government receipts that do not (i) increase obligations or (ii) deplete assets.
• These are tax revenues, interest, and dividends on government investments, cess, and other government receipts for services given.