What is the meaning of revenue receipts? What are the two main sources of revenue receipts?

Question 4. What is the meaning of revenue receipts? What are the two main sources of revenue receipts?
Class  Class 12
Subject Economics (Macroeconomics)
Category Class 12 Economics Solutions Sandeep Garg

Sandeep Garg Macroeconomics Class 12 Solutions Circular flow of Income – Long Questions Q.4 What is the meaning of revenue receipts? What are the two main sources of revenue receipts?




Solution:

Revenue receipts are those recurring receipts for the Government which neither results in reduction of its assets nor an increase in its liabilities. The two main sources of revenue receipts are:-

  • Tax revenue: – Tax is a compulsory payment to the Government imposed on citizens and corporates of a country by Law, in order for the Government to meet its expenditures. Two kinds of tax revenues are: –
    1. Direct tax revenue: – Direct Taxes are those taxes which are levied on and the burden to pay is on the same person or corporate. The Burden to pay a direct tax cannot be shifted on another person. Examples of Direct taxes are Income Tax, Corporate Tax, Wealth Tax etc.
    2. Indirect Tax revenue: – Indirect taxes are those revenue receipts for the government in which burden to pay can be shifted. In other words, the person on whom tax is levied and the person who ultimately bears the brunt of tax are different. Example, GST and excise duty.
  • Non-Tax revenue: – Non-Tax revenue refers to those revenue receipts of the government which is not a part of its tax receipts. For example: – Interest Received by the government, Fines etc.




Long Questions – Sandeep Garg Macroeconomics Class 12 Solutions Government budget and the Economy

Sandeep Garg Macroeconomics Class 12 Solutions

Part A: Introductory Macroeconomics
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