An Indian real estate company receives rent from Brampton Ltd. in Toronto. Where will this transaction be recorded in the BoP account?

In the credit side of current account

The correct answer is Option 1: In the credit side of current account

As, there is inflow of foreign currency in the form of rent, it would be on the credit side of the account. Now, the question is whether it will be in the capital account or current account. Capital account records all the transaction which affects the assets and liabilities of the countries. Whereas, current account records all the transactions of good and services and which are recurring in nature.

When an Indian real estate company receives rent from a foreign entity (Brampton Ltd. in Toronto), it represents an inflow of income from abroad. This type of transaction is part of the current account under the "Income Receipts" category, which includes earnings from investments like rent, interest, or dividends.