The Revenue Budget shows the current receipts of the government and the expenditure that can be met from these receipts.
Revenue Receipts: Revenue receipts are divided into tax and non-tax revenues.
Tax revenues consist of the proceeds of taxes and other duties levied by the central government. Tax revenues, an important component of revenue receipts, comprise of direct taxes – which fall directly on individuals (personal income tax) and firms (corporation tax), and indirect taxes like excise taxes (duties levied on goods produced within the country), customs duties (taxes imposed on goods imported into and exported out of India) and service tax.
Excise taxes are the single largest revenue earner. Other direct taxes like wealth tax, gift tax and estate duty (now abolished) have never been of much significance in terms of revenue yield and have thus been referred to as ‘paper taxes’.
Non Tax Revenue:
Non Tax Revenue includes interest receipts on loans given by central government, dividends or profits in investment of government, fees & other receipts for services rendered by government. Also, cash grants- in-aid received from foreign countries and international organizations.
Expense other than creation of physical or financial assets of central government, which means expenditure for normal functioning of government departments (day to day working)
interest payments on debt taken by government
grants to state government and others(even for creation of assets).
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