Official capital includes RBI's holdings of foreign currency and special drawing rights (SDR) held by the Government.

Banking capital includes movement into external financial asset and liabilities commercial and co-operative banks authorized to dealing in foreign exchange.

Private Capital consists of Foreign Investments, long-term loans, and Foreign Currency Deposits.

Balance of Trade denotes the difference between the value of Imports and the value of exports during the year.

Balance of payment refers to a systematic record of all economic transactions between the residents of one country and the residents of foreign countries during a particular period of time. For example: one year.

The current account balance includes two items
(i) Visible trade - Import and export of goods.
(ii) Invisible trade - Invisible service items like banking, shipping, insurance, travel and transportation.

The Capital Account consists of three components :
(i) Private Capital
(ii) Banking Capital
(iii) Official Capital

Credit Items :
i. Goods Export (visible)
ii. Invisible exports
(1) Transport service sold abroad
(2) Banking services sold abroad
(3) Insurance service sold abroad
(4) Income received on Loan and Investment made in Foreign Countries.
(5) Expenses incurred by Foreign tourists in India.

A balance of payment surplus indicates that country's exports are more than its imports and its government and residents are savers.

Balance of payment is the principal tool for analyzing the monetary position of international trade of a country just like Receipt and Payment account of enterprise revealing the net effect of cash movements during in an enterprise to a particular period.

1. Balance of trade is statement showing the net effect of export and import of a country
2. It records only transactions relating to merchandise, i.e. goods transactions
3. It does not record capital transactions
4. It is part of the current account of BOP
5. It may beat favorable or unfavorable or in an equilibrium state.
6. It is not true indicator of economic prosperity or economic relations of a country. Unfavorable balance of trade can be converted into favorable balance of payment.

The balance of payments consists of four components namely, Current Account, Capital Account, Unilateral Payments Account, Official Reserves Asset Account.
(i) Current Account :
The Current Account consists of two major items, namely,
(1) Merchandise Exports; and
(2) Invisible-Exports and Imports.
(ii) Capital Account: 
The Capital Account consists of three components :
(1) Private Capital
(2) Banking Capital
(3) Official Capital.
(iii) Unilateral Transfer Account:
The unilateral transfer is another term for gifts and includes private remittances, government grants, etc.
(iv) Official Reserves Account:
Official Reserves represent the holdings by the Government or official agencies.

 Sl.No   Basis   Direct Taxes   Indirect Taxes    1  Meaning  It is a systematic record of all Economic transactions happened between the resident of one country and resident of foreign countries during a particular period. Balance of Trade is a statement showing net effect of Export and Import of a Country.   2  Nature of Transactions recorded   It records both the transactions relating to goods and services.  It records only transactions relating to merchandise i.e. goods.   3  Capital Transaction It records Capital transactions It does not record Capital transactions   4  Structure It includes balance of Trade, balance of services, balance of unilateral transfers and balance of Capital transactions It is a part of Current Account of Balance of payments.   5  Net position It always remains balanced in the sense that receipt side is made equal to payment side. It may be at favourable or unfavourable or in equilibrium state   6  Indicator of Economic Status It is a true indicator of Economic performance of an Economy. It is not a true indicator of Economic prosperity or Economic relations of country.   7  Correcting unfavourableness  Unfavourable balance of payment leads to deficit in balance of payment situation. Unfavourable balance of trade can be converted into favourable balance of payment.

Capital Account:
The Capital Account consists of three Components.
(i) Private Capital
(ii) Banking Capital
(iii) Official Capital
(i) Private Capital:
Private Capital consists of Foreign Investments, long-term loans and Foreign Currency deposits.
(ii) Banking Capital:
It includes movement into external financial Asset and Liabilities, commercial and Co-operative banks authorised to deal in Foreign Exchange.
(iii) Official Capital:
It includes RBI's holdings of Foreign Currencies and Special Drawing Right (SDR) held by the Government.