What are Receipts?

Learn about Receipts with Vidya Balan
Kahaani 2012

Case breakdown: Movie Kahaani

The above scene shows, how Inspector Satyaki Sinha (played by Parambrata Chattopadhyay) is presenting a Saree (Indian dress) to Mrs. Bagchi (played by Vidya Balan). She, however, refuses to accept this Saree, which he tells her to consider as a gift from her husband.

Inspector Sinha mentions that he has a receipt from Khadi emporium and that her husband can pay him back.

In this blog, Learning Perspectives will explore receipts.

What are Receipts?

When something of value is transferred from one party to another, a written acknowledgment is given to the purchasing party. Many times, goods or services are refunded only if the receipt is shown. Receipts can be given by shopkeepers, vendors, suppliers, etc. Receipts are also used for warranty purposes. For example, Let’s assume X purchases a Rolex watch, it comes with a warranty of 1 year. If X damages the product, he has to present the receipt and avail of the warranty benefit.

Shop Receipts:

Shopkeepers give receipts when someone purchases anything of value. This receipt includes discount, credit, and any other adjustment. Many times, this receipt may also indicate the mode of payment undertaken by the customer.

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Modes of payment may include debit or credit card, cheque, cash, or digital wallet. This receipt also includes the invoice number. It may also include a message about a refund indicating the number of days. For example, A product, if damaged or expired can be returned within 3 days of purchase. This helps in a refund of the money. Sometimes, special offers, advertisements, discounts, etc can be showcased on this. For example: Get 1 free chocolate bar on purchase of 2 chocolate bars.

Under Accounting:

Receipts are used as proof in any financial transactions. In businesses, transactions need to be supported by a receipt. The sales receipt is a common receipt that serves as an accounting record.

Under Taxation:

According to the Indian Income-tax, Receipts are classified as below:

A) Revenue receipt

B) Capital receipt.

Revenue receipts are recurring in nature like salary, profit from the business, interest income, etc. Capital receipts are generally of isolated nature like receipts on account of the sale of a residential building, personal jewelry, etc. ​

The general rule under the Income-tax Law is that all revenue receipts are taxable unless they are specifically granted exemption from tax and all capital receipts are exempt from tax unless there is a specific provision for taxing them.​

Receipts Budget shows a detailed summary of the revenue and capital receipts of the government. This forms a part of the annual financial statement.

References:

https://www.incometaxindia.gov.in/pages/faqs.aspx?k=General+FAQs&c=4

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