Which of the following is a component of the capital account?

Purchase of shares of a foreign company by an Indian resident.

The correct answer is Option (4) → Purchase of shares of a foreign company by an Indian resident.

This transaction involves the acquisition of foreign assets, which leads to a change in ownership of capital between residents and non-residents. Such transactions are recorded in the capital account of the Balance of Payments.

The other options are not part of the capital account:

• Export of merchandise → part of the current account (visible items of trade).

• Remittances received from Japan → part of the current account (transfer receipts).

• Purchase of IT services from the USA → part of the current account (invisible imports).