WBCS.LIVE practice question

Which of the following is NOT a part of the capital receipts?

Solve this multiple-choice question and check the correct answer with its explanation below.

Answer options

  1. Disinvestment
  2. Recovery of loan
  3. Tax revenue
  4. Borrowing

Correct answer and explanation

Correct answer: Tax revenue

Explanation: Capital receipts are those which either create a liability (like borrowings) or reduce an asset (like recovery of loans, disinvestment). They are non-recurring in nature and do not arise from normal government operations. Tax revenue, on the other hand, is a part of revenue receipts, since it is a regular source of income for the government and does not create any liability. Thus, disinvestment, recovery of loans, and borrowings are capital receipts, while tax revenue is not.