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Revenue Receipts of Government

Those Receipts of Govt which are Non Redeemable (which cannot be reclaimed from govt)

are called Revenue Receipts

They are recurring (repeating) in nature.

 

It is of different types

  • Tax Revenue
  • Non Tax Revenue

Types of Revenue Receipts - Teachoo.JPG

Lets learn about it one by one

 

Tax Revenue

They are proceeds of different taxes which are levied by Central Govt like GST, Income Tax

These taxes can be Direct Tax or indirect Tax

Types of Tax Revenue - Teachoo.jpg

Direct Tax

Income Tax is charged on Individuals (Called Personal Income Tax) as well as on Companies (called Corporate Tax)

Higher the Income, Higher the tax Rate

 

Indirect Tax

Earlier different taxes were imposed like Service Tax (on services), Central Sales Tax (on sale of goods) and Excise (on Manufacturing)

Now, all these are replaced by GST from 1 July 2017

Exception: On certain goods, still Vat and Excise is applicable and not GST like Petrol, Diesel

Also on import, export of goods; Custom Duty is charged by Govt which also is part of tax Revenue

 

Non Tax Revenue

It contains following:

Cash Grants

Govt receives cash grants (aid) from different countries and organizations like UNO

 

Dividends and Profit

Central Govt owns shares of many PSU (Public sector Undertaking) like SBI,ONGC,BHEL

Profits of these PSU are given to Central Govt in form of Dividends

 

Interest Received

Central Govt gives loans to State govt etc on which it earns interest

 

Fees and other Receipts

Govt charges fees for Different Services like Fees for Company Registration etc

It also charges late fees and penalties for late deposit of taxes etc

Different Types of Non Tax Revenue - Teachoo.JPG

 

Different Types of Non Tax Revenue Part 2 - Teachoo.JPG

SUMMARY

Summary Revenue Receipts - Teachoo.JPG

NCERT Questions

No questions in this part

Other Books

Question 1

In the following questions, select the correct answers:

Interest Income is a part of:

  1. Non-tax revenue
  2. Revenue Receipts
  3. Both A and B
  4. Neither A nor B
View Answer

Question 2

Fees of a government college is a revenue receipt because:

  1. It creates liability of the government
  2. It neither creates liability nor reduces any assets of the government
  3. It creates liability or increases asset of the government
  4. It reduces assets of the government
View Answer

Question 3

Identify the indirect tax from the following options.

  1. Corporate Tax
  2. Goods and Services Tax (GST)
  3. Income Tax
  4. Capital Gains Tax
View Answer

Question 4

Direct tax is called direct because it is collected directly from:

  1. The producers on goods produced
  2. The sellers on goods produced
  3. The buyers of goods
  4. The income earners
View Answer

Question 5

Identify the tax whose burden can be shifted:

  1. Income tax
  2. Goods and Service Tax (GST)
  3. Corporate Tax
  4. None of these
View Answer

Oswaal Questions

Question 1

Which one of the following is a combination of direct taxes?

  1. Excise duty and Wealth tax
  2. Service tax and Income tax
  3. Excise duty and Service tax
  4. Wealth tax and Income tax
View Answer

Question 2

The Non-tax revenue in the following is:

  1. Export duty.
  2. Import duty.
  3. Dividends.
  4. Excise.
View Answer

Question 3

Direct tax is called direct because it is collected directly from:

  1. The producers on goods produced.
  2. The sellers on goods sold.
  3. The buyers of goods.
  4. The income earners.
View Answer

Question 4

Read the following news report and answer the questions that follow:

MUMBAI: Investors were relieved as the finance minister Nirmala Sitharaman avoided an increase in the long-term capital gains tax on equity investments and securities transaction tax in the Union Budget for 2021-22 announced today.

Heading into the Budget, most investors were concerned that the government may look at increasing the long-term capital gains tax or the securities transaction tax in order to boost its revenues, especially as the stock market has witnessed a breakneck rally since the beginning of April.

In her Budget speech in July 2019, the finance minister had reintroduced the long-term capital gains tax after 15 years.

Currently, individuals who make capital gains of more than Rs1 lakh on their equity investment after a holding period of more than one year have to pay a tax of 10 per cent on the capital gains.

However, the capital gains tax for individuals in the highest bracket of earnings comes around 15 per cent inclusive of access.

Money managers had said that the government needed to bring out an equity friendly budget, implying no changes in taxations related to the stock market, in order to ensure that its divestment plans went smoothly in the next fiscal year.

"Budget 2021: Investors breathe a sigh of relief as FM skips LTCG, STT hike" - The Economic Times - February 1st, 2021

 

Question 1

What type of tax is the Capital Gains Tax?

  1. Direct Tax
  2. Indirect Tax
  3. It is access
  4. It is a fine
View Answer

Question 2

What is the reason for the government to increase taxes?

  1. To extract money from the people usable income of the rich and increase that of the poor.
  2. To use the money for themselves
  3. To achieve the objective of equality in income distribution
  4. To get their salary.
View Answer

Question 3

Why didn't the government say anything about the capitals gain tax?

  1. To stabilize the economic growth
  2. To help the economy for economic growth
  3. To rectify the losses that happened due to Covid-19
  4. All of the above
View Answer

Question 4

The capital gains come in the highest bracket of earning comes around ________.

  1. 10%
  2. 15%
  3. 20%
  4. None of the above
View Answer

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Transcript

Types of Revenue Receipts Tax Revenue (Revenue from Tax) Non-tax Revenue (Revenue Other than Tax) Example Tax Collected by Government from Public Example Aid Received By Government from Foreign Country Public Govt Types of Tax Revenue This Tax Revenue may be from Direct Tax or Indirect Tax Tax Direct Tax Indirect Tax Person pays tax from own pocket Person collect tax from customer, pays to government Example Income Tax Corporation Tax (Income tax for Companies) Example Earlier  VAT, Service Tax Excise applicable Now  Replaced by GST Different Types of Non Tax Revenue Example 1 -Aid Aid /Cash Grant Received by Government from Foreign Country Example 2 -Dividend Dividend (Profit share) received by Government from PSU Different Types of Non Tax Revenue –Part 2 Example 3 –Interest Received Interest received by Govt on loan given to State govt Example 4 –Fees Received Govt Receives fees from Public for providing different services Summary-Revenue Receipts (Receipts of Govt which are Non-Redeemable) Tax Revenue (Revenue from Tax) Non-tax Revenue (Revenue Other than Tax) Direct Tax For Individuals Personal Income Tax For Companies Corporation Tax Indirect Tax Earlier Excise, Service Tax ,CST Now GST 4 Types Cash Grant(Aid) From Outside Countries Dividend From PSU Interest Income On Loans Given Fees From Public, Business

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CA Maninder Singh

CA Maninder Singh is a Chartered Accountant for the past 12 years. He also provides Accounts Tax GST Training in Delhi, Kerala and online.