Revenue Receipts in Government Budget – definition, types, examples class 12

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looking for what is revenue receipts in government budget, it’s definition, types, and examples as per the class 12 syllabus.

This topic is concerned with the government budget chapter of Macroeconomics.

Revenue receipts are one of the components of Revenue Budget or Budget Receipts.

What is the revenue receipts

In simple words, the revenue receipts are the source of income of the government. Such income is of recurring nature and does neither create any liability nor result in any reduction in the assets of the government.

Definition of Revenue Receipts

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

S.K Aggarwal

Revenue receipts refer to those receipts which neither create any liability nor cause any redcution in the assets of the government.

Sandeep Garg

Revenue receipts of the government are those money receipts which do not create a liability for the government and as well do not lead to reduction in assets of the government

T.R Jain

Revenue Receipts are those receipts that do not lead to a claim on the government. They are therefor termed non-redeemable.

NCERT

What are the types of Revenue Receipts

Revenue Receipts are broadly classified into two types.

  1. Tax Revenue receipts
  2. Non-Tax Revenue receipts

Tax Revenue:-

One of the main sources of revenue of the government is taxes.

A tax is a legally compulsory payment made to the government by the people and companies without reference to any direct benefit in return.

Definition of Tax Revenue Receipts

Tax revenue refers to sum total of receipts from taxes and other duties imposed by the government

Examples of Tax Revenue Receipts

Income tax, corporation tax, Estate Duty, Gift tax, Customs duty, Excise duty, GST (goods and services tax)

Types of Tax Revenue

There are two kinds of Tax revenue

  1. Direct Taxes
  2. Indirect Taxes

Direct Taxes:-

Direct taxes are imposed by the government on the property and income of individuals and companies and are directly paid by them.

Definition of Direct Tax

A direct tax is the one the final burden of which is borne by the person on whom it is imposed.

T.R Jain

When the ‘liability to pay’ and ‘incidence’ of a tax lie on the same person, It is treated as a direct tax.

S.K Aggarwal

According to Prof. Dalton, “A direct tax is really paid by the person o whom it is legally imposed.”

T.R Jain
Examples of Direct Tax

Income tax, corporation tax, house property tax, wealth tax etc,.

Indirect Taxes:-

Indirect tax refers to those taxes which affect the income and property of individuals and companies through their consumption expenditure.

When the ‘liability to pay’ and ‘incidence of a tax lie on different persons, it is treated as an indirect tax.

S.K Aggarwal

An Indirect tax is the one whose initial burden or impact is on one person but he succeeds in shifting the burden to another persons.

T.R Jain

According to Prof. Dalton, “An indirect tax is imposed on one person but paid partly or wholly by another.”

T.R Jain
Examples of Indirect Taxes:-

Customs Duty, Excise Duty, GST (Goods and Services Tax)

Non Tax Revenue Receipts:-

The Revenue receipts arise to the government from sources other than the tax is termed as ‘Non-Tax Revenue receipts.

Definition of Tax Revenue Receipts:-

Following are the few definitions in various books.

Non-tax receipts are those receipts which arise from sources other than taxes.

T.R Jain

Income receipt from sources other than the tax is classed as ‘non tax revenue.

S.K Aggarwal

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

Sandeep Garg

Examples of Non-Tax Revenue.

Non tax revenue of the central government mainly consists of

  1. interest receipts on account of loans by the central government,
  2. dividends and profits on investments made by the government
  3. Fees and other receipts for services rendered by the government.
  4. Cash grants in aid from foreign countries and international organisation.

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Anurag Pathak
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