difference between capital receipts and revenue receipts pdf

Difference between capital receipts and revenue receipts pdf

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capital and revenue receipts pdf

In general, two types of receipts occur during the course of business.

Income Tax is levied on income of assessee and not an every receipt which he receives. The method of charging tax on different types of receipt is different. This make the distinction between capital and revenue of vital importance. For this distinguish capital and revenue items can be divided in to 3 sub-parts :.


All Government receipts which either create liability or reduce assets are treated as capital receipts whereas receipts which neither create liability nor reduce assets of Government are called revenue receipts. Government receipts which neither i create liabilities nor ii reduce assets are called revenue receipts. These are proceeds of taxes, interest and dividend on government investment, cess and other receipts for services rendered by the government. These are current income receipts of the government from all sources. Government revenue is the means for government expenditure.

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Receipts which are not revenue are capital receipts e. Here, please note that Loan recovery is Capital Receipt but the interest received on these loans is revenue receipts. Revenue and capital receipts are recognised on accrual basis as soon as the right of receipt is established. Commission received on sale of inventory on a consignment basis. Capital receipts received other than business operations whereas revenue receipts are received from business operations. Receipts and invoices keep the records of expenditures. Statement of financial position as at 30 September

Items as revenue receipts for upcoming years in the difference between capital expenditure is a company, interest payments in lieu of repayment of goods and.

capital and revenue receipts pdf

Checkout Hindi version of Tutor's Tips. To know the Difference Between capital and revenue receipts we have to know the meaning of both terms. Receipts meaning the amount received or will be received from operational and non-operational activities of the business.

In deciding whether a particular receipt is of a capital or revenue type, the following considerations are considered to be immaterial and not going to decide or change the character or nature of the receipt. Receipt in lump sum or in Instalments. Whether any income is received in lump sum or in instalments, it will not make any difference as regards its nature, e. Instead of this he enters into an agreement to get a sum of 36, in lump sum to serve for a period of three years.

Receipts are just the opposites of expenses. But without receipts, there may be no existence of the business. Not all receipts directly increase the profits or decrease the loss.

Revenue and Capital Receipts of Government Receipts: it’s Definition and Differences

Offers that as to differentiate between revenue receipts are the expenditure?


  • Chris B. 11.05.2021 at 18:36

    Capital Receipts vs Revenue Receipts · 1. Capital receipts refer to amounts received by a business which lead to an increase in the total capital. · 2. They are​.

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