Revenue receipts are those receipts which__________________.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Do not lead to a claim on the government
Taxes, fees, and interest and dividends that the government receives never have to be paid back, and nobody can later demand them from the government. Such receipts are revenue receipts: they do not lead to a claim on the government, and so they are called non-redeemable. They are divided into tax revenue and non-tax revenue.
Why the other options are incorrect
Option (1) Reduce the liability of the government — Incorrect. A receipt does not reduce a liability; it is the repayment of a loan, an expenditure, that does. Revenue receipts leave the government’s liabilities and assets as they were.
Option (2) Increases the assets of the government — Incorrect. Assets are created by capital expenditure. A receipt from the sale of an asset even reduces the government’s assets, and that makes it a capital receipt.
Option (4) Debt creating receipts — Incorrect. Borrowings create a liability, so they are capital receipts, the opposite of revenue receipts.
NCERT (2025-26): “5.1.2 Classification of Receipts … Revenue Receipts: Revenue receipts are those receipts that do not lead to a claim on the government. They are therefore termed non-redeemable. They are divided into tax and non-tax revenues.… …Capital Receipts: The government also receives money by way of loans or from the sale of its assets. Loans will have to be returned to the agencies from which they have been borrowed. Thus they create liability.…” |