Bad debts
This query is : Resolved
Nikhil Kaushik
(Expert)
16 September 2014
please BE elaborate while presenting your query Ms B.
17 September 2014
MR A SOLD GOODS TO MR B OF RS 5000. NOW MR B NOT PAID ANYTHING TO MR A . SO RS 5000 IS NOW B.DEBT FOR MR A. AND SUCH 5000 IS TAXABLE TO MR B BECAUSE IT IS ALLOWED AS A DEDUCTION WHEN IT IS PURCHASED.
IN SHORT , B.DEBT IS TAXABLE FOR THE DEBTOR
IN SHORT , B.DEBT IS TAXABLE FOR THE DEBTOR
Nikhil Kaushik
(Expert)
17 September 2014
becoming a bad debt in A's books wont affect B's books. Unless and until he writes off the liability, it remains a liability and no tax can be charged
17 September 2014
DID U MEAN ALLOWED AS A DEDUCTION IN THE BOOKS OF A IF HE WRITES OFF . AND WHAT ABOUT MR . B
Nikhil Kaushik
(Expert)
17 September 2014
Ms B
When Mr B buys the goods, he creates a liability in his books towards Mr A.
deduction for expenses are allowed on accrual basis, so Mr B will claim the same in his tax return for the corresponding assessment year.
So where is the issue of paying tax!
When Mr B buys the goods, he creates a liability in his books towards Mr A.
deduction for expenses are allowed on accrual basis, so Mr B will claim the same in his tax return for the corresponding assessment year.
So where is the issue of paying tax!
Nikhil Kaushik
(Expert)
17 September 2014
With regards to Mr A. He has the option of writing of bad debts and avoid paying tax
19 September 2014
ANSWER TO YOUR LAST TO LAST ANSWER :
I KNOW SIR THAT DEDUCTION IS ALLOWED OF EXP. ON ACCRUAL BASIS.BUT NOW MR B IS NOT LIABLE TO PAY ANY EXP(PURCHASE AMOUNT ). SO a DEDUCTION WHICH WAS ALLOWED EARILER WHICH IS AGAIN TAXABLE AS A DEEMED INOCME
I KNOW SIR THAT DEDUCTION IS ALLOWED OF EXP. ON ACCRUAL BASIS.BUT NOW MR B IS NOT LIABLE TO PAY ANY EXP(PURCHASE AMOUNT ). SO a DEDUCTION WHICH WAS ALLOWED EARILER WHICH IS AGAIN TAXABLE AS A DEEMED INOCME
Nikhil Kaushik
(Expert)
19 September 2014
How is mr b not liable to pay? Mere writing off in d books of seller wont mean mr b is not liable any more
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