Question : Which of the following is an example of capital receipt?
Option 1: Disinvestment of Public Sector Banks by the government
Option 2: Passport fees
Option 3: Land registration fees
Option 4: General donation
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Correct Answer: Disinvestment of Public Sector Banks by the government
Solution : The correct option is the Disinvestment of Public Sector Banks by the government .
The disinvestment of Public Sector Banks (PSBs) by the government is considered a capital receipt. In financial terms, capital receipts refer to those funds that a government raises by selling capital assets or by incurring liabilities. Disinvestment involves selling off a portion of the government's ownership in public sector entities, such as banks. When the government sells its shares in a PSB, it receives funds in return. These funds are categorised as capital receipts because they represent an inflow of capital into the government's coffers.
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