Receipts can be broadly classified as 1) Revenue receipts 2)Capital receipts The rule regarding the receipts under the Income tax Act says that , all revenues are taxable until and unless a receipt is specifically exempted and all capital receipts are exempted from taxation until there is a provision to tax it . Items like gifts and loan are in such nature of capital which does not attract tax. In lay man language all the revenue derived from a a source is called revenue receipts like salary, rent, interest or dividend profits. And on other hand if the income is earned on account of sale or purchase of the source then it is called capital receipts. For example income derived from Sale of land and building, business, investment etc.