Question

Giving reasons, categorise the following into revenue receipts and capital receipts.
(i) Recovery of loan, (ii) Corporation tax, (iii) Dividend on investment made by government and, (iv) Sale of shares of public sector undertaking, (v) Tax deposit (vi) Disinvestment.

Answer 1

(i) it is a capital receipt as it reduces the assets of the government.
(ii) Corporation tax is a revenue receipt as it does not result in any change in assets or liabilities of the government.
(iii) It is a revenue receipt as it does not result in any change in assets or liabilities of the government.
(iv) It is a capital receipt as it results in reduction of assets of the government.
(v) Tax deposit is a revenue receipt as it does not result in any change in assets or liabilities of the government.
(vi) Disinvestment is a capital receipt as it results in reduction of assets of the government.