Question

Q. Which of the following are part of 'Capital Receipts'?

Select the correct answer from the codes given below:

• A.
  1 and 2 only
• B.
  1, 3 and 4 only
• C.
  2, 3 and 4 only
• D.
  1 and 3 only

Answer 1

The correct option is D

1 and 3 only
Explanation:

• All the receipts of government which either create liability or reduce financial assets are termed as capital receipts. It includes:
• Small savings (Post Office Saving Accounts).
• Proceeds obtained after the disinvestment in Public Sector Units and Provident Funds.
• Grants obtained by the government do not create any liability as it doesn’t have to be returned back. Thus, grants form part of the revenue receipt.
• Custom duty is an indirect tax which is a part of revenue receipt.