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 the 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 that is a part of a revenue receipt.