Which of the following is NOT included in capital receipts?

The correct option is Taxes.

To understand why taxes are not included in capital receipts, let us break down the classification of government receipts into two main categories: Revenue Receipts and Capital Receipts.

1. Revenue Receipts:
These are the receipts of the government that meet two key conditions:
- They do not create any liability for the government (i.e., the government is not obligated to return this money).
- They do not cause any reduction in the assets of the government.
Revenue receipts are regular, routine, and recurring in nature. The primary source of revenue receipts is tax revenue (including direct taxes like income tax and corporate tax, and indirect taxes like GST) along with non-tax revenues (such as fees, fines, and interest received on loans given to states).

2. Capital Receipts:
These are government receipts that satisfy at least one of the following conditions:
- They create a liability for the government (e.g., borrowings, which the government must repay in the future).
- They lead to a reduction in the assets of the government (e.g., recovery of loans or disinvestment, where the government sells its stake in public enterprises).
Capital receipts are generally non-recurring and represent capital inflows that affect the assets or liabilities of the government.

Now, let us analyze the options given in the question:
- Borrowings: These create a liability for the government, making them a capital receipt.
- Recovery of loans: This reduces the government's assets (financial claims on others), making it a capital receipt.
- Foreign aid: Foreign aid, especially in the form of capital grants or loans from international bodies, represents a capital receipt.
- Taxes: Taxes are compulsory payments made by citizens and corporations to the government. They do not create any liability to pay them back, nor do they reduce any government assets. Thus, taxes are classified under revenue receipts, not capital receipts.