Government receipts are divided into two groups”Revenue Receipts and Capital Receipts. 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. 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. In the same way, as production is meant for consumption. Revenue receipts are further classified Into Tax Revenue and Non­tax Revenue as explained in Section 9. 6. Capital Receipts:Government receipts which either (i) create liabilities (e. g. borrowing) or (ii) reduce assets (e. g. disinvestment) are called capital receipts. Thus when govt. raises funds either by incurring a liability or by disposing off its assets, it is called a capital receipt. Hence, tax receipts are not a Capital Receipt but revenue receipts of the govt. budget.