Which of the, following does not form part of current account of Balance of Payments ?

The Balance of Payments (BoP) is divided into the current account and the capital account. The current account records transactions involving the trade of goods (visible trade), services (invisible trade), and transfer payments like remittances [2]. It also includes income receipts and payments, such as factor income from land, labor, and capital [4]. In contrast, the capital account records transactions that lead to a change in the assets or liabilities of a country's residents or its government [4]. Capital receipts and payments, which include foreign direct investment, loans, and banking capital, are specifically categorized under the capital account rather than the current account [4]. Therefore, capital receipts and payments do not form part of the current account, as they represent changes in financial claims and ownership rather than the flow of income or trade in goods and services [5].

Sources

1. [1] Macroeconomics (NCERT class XII 2025 ed.) > Chapter 6: Open Economy Macroeconomics > Balance on Current Account > p. 87
2. [2] Macroeconomics (NCERT class XII 2025 ed.) > Chapter 6: Open Economy Macroeconomics > 6.1.1 Current Account > p. 86
3. [4] Indian Economy, Vivek Singh (7th ed. 2023-24) > Chapter 2: Money and Banking- Part I > 2.27 Balance of Payment (BoP) > p. 107
4. [3] Indian Economy, Nitin Singhania .(ed 2nd 2021-22) > Chapter 16: Balance of Payments > IRVE > p. 487
5. [5] Macroeconomics (NCERT class XII 2025 ed.) > Chapter 6: Open Economy Macroeconomics > Errors and Omissions > p. 90