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Budget Receipts – meaning, types, examples definition class 12

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Looking for what is budget receipts in government budget it’s meaning types definition and examples class 12 CBSE, ISC, and other state Board.

See, Budget Receipts are the total sources of government revenue in a fiscal year.

Let’s understand it in detail.

What is Budget Receipts in Government Budget Class 12

Budgeted receipts are the funds planned to be raised from various sources by government within the fiscal year.

Types of Budget Reveipts

These receipts are classified into two groups:

  1. Revenue Receipts
  2. Capital Receipts

What is Revenue Receipts in government budget Class 12

The receipts which neither create any liability nor lead to any reduction in assets are called revenue receipts.

Here revenue refers to the income of the government.

further revenue receipts are divided in two parts

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Types of Revenue Recipts Class 12

There are two types of Revenue Receipts

  1. Tax Revenue
  2. Non-Tax Revenue

Types of Tax Revnue Recipts

There are two types of Tax Revenue

  1. Direct tax revenue receipts
  2. Indirect tax revnue receipts

What is Direct tax revenue receipts Class 12

Direct taxes refer to taxes that are imposed on the property and income of individuals and companies.

following are the few characteristics of direct tax

  • They are imposed on individuals and companies and their monetary burden are borne by those on whom they are levied.
  • The liability to pay the tax and actual burden of the tax lie on the same person.
  • Burden of the tax can not be shifted to others.
  • Direct tax directly affect the income level and purchasing power of individual and help to change the level of aggregate demand in the economy.

Example of Direct tax

  1. Income tax
  2. Corporate tax
  3. Interest tax
  4. Wealth tax
  5. Death Duty
  6. Capital gains tax

What is Non Tax Revenue in Government Budget

Non Tax revenue refers to receipts of the government from all sources other than those of tax receipts.

What are the Types of Non Tax Revenue

The main source of Non-Tax Revenue are

Interest:-

Interest is the revenue received on loans extended by the government.

Dividends:-

It is the income received on the equity (shares) of public enterprises by the government.

Profit:-

It is the income earned from the enterprises directly owned by the government.

External Grants:-

It is the financial help received from the foreign governments.

What are Capital Receipts in Government Budget

Raising of funds by the government either by incurring liability or by disposing of assets held by it is treated as capital receipts.

In other words, we can also say

Capital receipts refer to those receipts which either create liability or cause a reduction in the assets of the government.

following are the few characteristics of the capital receipts.

  • It must create a liability for the government. for example borrowing by the government
  • It must cause a decrease in the assets of the government. for example, sale of shares of public enterprises etc.
  • Capital receipts are non recurring and non routine in nature

Types of Capital Receipts in Government Budget

Recovery of Loans

The central government grants loans to state governments, union territory governments, and other parties.

Granting loans increases the financial assets of the govenment. When government recovers these loans from its debtors it is treated as capital receipts. It leads to a decline in the financial assets of the government.

Borrowing and other liabilities

It includes mainly borrowings by the government. The government borrows from the

  1. Market
  2. from the public
  3. from the central bank
  4. from foreign governments and bodies.

Raising funds through borrowing leads to an increase in the liabilities of the government. It is a capital receipt

Disinvestment

When the government raises funds by selling its equity holding, it is called disinvestment. It leads to a reduction in the assets held by the government. It is a capital receipt.

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Anurag Pathak
Anurag Pathak is an academic teacher. He has been teaching Accountancy and Economics for CBSE students for the last 18 years. In his guidance, thousands of students have secured good marks in their board exams and legacy is still going on. You can subscribe his youtube channel and can download the Android & ios app for free lectures.
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