How are capital receipts different from revenue receipts? Discuss briefly.
CBSE 58-1-1 PAPER SET 2019
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The difference between capital receipts and revenue receipts is given as follows:
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Basis
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Capital Receipts
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Revenue Receipts
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Effect on government assets
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Capital receipts refer to those receipts of the government, which cause a reduction in the government assets.
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Revenue receipts are those receipts of the government which does not cause any reduction in the assets of the government.
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Effect on government liability
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Capital receipts refer to those receipts of the government, which create a liability for the government.
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Revenue receipts those receipts of the givernment which does not create any liability for the government.
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Examples
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These receipts comprisesn of recovery of loans, borrowings of governments and other liabilities of government.
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These receipts comprises of tax and non-tax receipts, duties and fines, interest and dividends receipts on government investments and assets.
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