account

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

25 May 2010 In customer account credit amount is showing for a longer period and that customer has not showing any claim for. can any one guide after what period we can transfer that amount to income a/c?

CA CS CIMA Prakash Somani

CA CS CIMA Prakash Somani (Expert)
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25 May 2010 it is 8 years though i am not very sure

CA Kishore Tallam

CA Kishore Tallam (Expert)
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26 May 2010 As per the section 2(j) and 3 of law of limitation, a person has to claim the dues within 3 years from the close of the financial year in which the last transaction is entered in the account after which the debtor is not liable to pay. Hence a company can write back such balances after 3 years. However, the company can adopt its own policy for the same which should satisy the legal requirements also.