give 4 examples of direct and indirect taxes, capital receipts and revenue receipts, revenue deficit and fiscal deficit with explations to their examples
Examples of Direct Taxes and Indirect Taxes
Direct Taxes- Income tax, Wealth tax, Gift tax, Corporation tax
These taxes are considered as direct taxes because such taxes are borne by the person on whom it is imposed and the burden of such taxes cannot be shifted from the payer to the bearer.
Indirect Taxes- Sales tax, Excise duties, Custom duties, Entertainment tax
These taxes are considered as indirect taxes because the burden of such taxes can be shifted from the payer to the bearer
Examples of Capital Receipts and Revenue Receipts
Capital Receipts- Government borrowings from world Bank, Government borrowings from public through Public Provident Fund, Recovery of loans by the central government from the state government, Receipts from disinvestment
These receipts are considered as capital receipts as they cause a reduction in the government assets and also create a liability for the government.
Revenue Receipts- Receipts from direct taxes such as income tax, Receipts from indirect taxes such as sales tax, Interest receipts of the government, Administrative receipts of the government such as license fees.
These receipts are considered as revenue receipts as they neither creates any liability nor it creates any reduction in the assets of the government.
Revenue Deficit and Fiscal Deficit
Revenue deficit refers to the excess of revenue expenditure over revenue receipts. That is,
Revenue Deficit = Revenue Expenditure – Revenue Receipts
Fiscal Deficit refers to the difference between the total budget expenditure and total budget receipts of the government, other than the borrowings and liabilities. That is,
Fiscal Deficit = Budget Expenditure – Budget Receipts (other than borrowing and liabilities)