Municipal taxes of Rs.3,500 are paid in connection with a property which was purchased for Rs. 1,50,000. Payment of municipal taxes is classified as ______________.

Capital expenditure

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Revenue expenditure

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Deferred revenue expenditure

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Deferred capital expenditure

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Solution

The correct option is A Revenue expenditure
Municipal taxes of Rs.3,500 are paid in connection with a property which was purchased for Rs. 1,50,000. Payment of municipal taxes is classified as Revenue expenditure.
Because it is recurring in nature and municipal taxes are to be paid periodically.

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Similar questions

From the following data about a government budget, find (a) revenue deficit, (b) fiscal deficit, and (c) primary deficit:

Items (Rs in lakh)

(i) Tax revenue 50

(ii) Revenue expenditure 110

(iii) Capital expenditure 210

(iv) Non-tax revenue 30

(v) Capital receipts net of borrowing 140

(vi) Interest payments 20

R s . 40 c r o r e s

R s . 90 c r o r e s

R s . 60 c r o r e s

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