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What Is Revenue Receipt And Capital Receipt

Views: 4 | Updated On: | By Jitu Jangir

Revenue receipt and capital receipt are two different types of receipts that an individual or entity may receive.

Revenue receipt refers to the income that is earned from the regular operations of a business or from other sources of income such as salary, rent, interest, and so on. It is the income that is earned on a regular basis and is used to cover the ongoing expenses of the business or individual. Revenue receipts are taxed in the year in which they are received and are considered as taxable income.

Capital receipt, on the other hand, refers to the income that is earned from the sale of a capital asset such as property, shares, or other investments. It is the income that is earned as a result of the sale of an asset that has been held for a certain period of time. Capital receipts are not taxed in the year in which they are received, but they are taxed when they are considered as capital gains which is the difference between purchase and sale price of the asset. The capital gains tax rate depends on the holding period of the asset and the type of the asset.

It's important to note that capital receipts can also be in the form of gifts, inheritance, and some other sources. These receipts are not considered as taxable income but may have implications on the wealth tax, or income tax in some cases.

It's also important to note that the laws and regulations regarding revenue and capital receipts may vary by country and may change over time. Taxpayers should stay informed of the current laws and regulations to ensure compliance and to take advantage of any eligible exemptions or deductions.

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