Which of the following statements are incorrect?

(A) Loans from IMF is a Revenue Receipt.
(B) Capital Receipts are shown on the liabilities of the balance sheet.
(C) Interest payment by the government represents a representation of fiscal deficit.
(D) Revenue Deficit is the excess of capital receipts over the revenue receipts.

Choose the correct answer from the options given below:

(A), (C) and (D) only

The correct answer is Option (2) → (A), (C) and (D) only

(A) Loans from IMF is a Revenue Receipt. Incorrect. Loans, whether from the IMF or any other source, are Capital Receipts. They create a liability for the government (as they have to be repaid) and typically lead to an increase in assets or a reduction in liabilities. Revenue receipts, on the other hand, are regular, recurring income that doesn't create a liability or reduce assets (e.g., taxes).

(B) Capital Receipts are shown on the liabilities of the balance sheet. Correct. Capital receipts, such as borrowings (loans) or disinvestment proceeds, represent sources of funds that either create a liability (like debt) or reduce an asset (like selling a public sector undertaking). In an accounting sense for a balance sheet, liabilities represent obligations or sources of funds that need to be repaid or accounted for, and capital receipts often contribute to these liabilities.

(C) Interest payment by the government represents a representation of fiscal deficit. Incorrect. Interest payment by the government is a Revenue Expenditure. While high interest payments can be a consequence of accumulated past fiscal deficits (as the government has borrowed heavily), the interest payment itself is not a representation of the current fiscal deficit. The fiscal deficit is the total borrowing requirement of the government, which is the difference between total expenditure and total receipts (excluding borrowings).

(D) Revenue Deficit is the excess of capital receipts over the revenue receipts. Incorrect. Revenue Deficit is the excess of Revenue Expenditure over Revenue Receipts. It indicates that the government's current income is not enough to meet its current expenses. The statement describes something that doesn't align with the definition of any standard deficit measure.

Note: The answer as per NTA is Option 1 which is apparently incorrect.