Question

Distinguish between:
1. Revenue budget and capital budget
2. Direct tax and indirect tax
3. Deficit budget and balanced budget

Answer 1

1.

Revenue budget	Capital budget
It consists of items that neither lead to a change in the assets nor change the liabilities of a government.	It consists of items that lead either to a change in the assets or a change in the liabilities of a government.
It consists of revenue receipts and revenue expenditure.	It consists of the capital receipts and capital expenditure.
It consists of revenue and expenditure that are incurred in day to day life.	These include items which are long term in nature.

2.

Direct tax	Indirect tax
It is imposed directly on the taxpayer and is paid by the taxpayer directly to the government.	It is a tax collected by intermediaries (for example, retailers) from the ultimate taxpayers i.e. the consumers.
The incidence and impact of the tax is on the same person.	The incidence and impact of the tax is on different persons.
For example - Income tax, property tax.	For example - VAT, custom duty.

3.

Deficit budget	Balanced budget
It refers to the excess of total budget expenditure over the total budget receipts.	It refers to the budget in which the total budget expenditure is equal to the total budget receipts.
It leads to an increase in the liabilities of the government or causes a reduction in its reserves.	It has no effect on the liabilities or the reserves of the government.