Mr. Pritpal Singh recently filed his income tax return. How will we treat the income tax received by the government in the government budget?
Answer & explanation
Correct answer: option 1
The correct answer is Option 1: Revenue receipt
Revenue receipts are those receipts of the government which do not affect the asset and liability status of the government. These are further divided into 2 categories i.e. Tax receipts and Non-tax receipts.
The tax paid by Mr Pritpal Singh, will be considered under Revenue receipts ( Tax receipts).