Loan Written Off
This query is : Resolved
11 October 2019
A private limited company is engaged in finance activities. It provides loans to other companies. Out of this a loan is irrecoverable and the company wishes to write off that loan thru Profit & Loss Account. Is the loan as such written off an allowable expenditure?
12 October 2019
yes it will be treated as bad debt
15 October 2019
Pl clarify whether lending is really the principal object of the company under consideration?
If you could prove the business nexus of lending only then alone can you claim it as bad debts under section. 36(1)(vii)
If you could prove the business nexus of lending only then alone can you claim it as bad debts under section. 36(1)(vii)
18 October 2019
Thanks for the advices. But if lending comes in ancillary objects, then?
18 October 2019
Loans extended without direct business nexus are not allowable as bad debts. The write-off would be disallowed.
You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now
Click here to login now
Similar Resolved Queries
Unanswered Queries
- About TDS & Income Tax
- Section 194JA & JB Income which ITR Form to use
- Pass word to open justification report for Q1 for FY 2026-27
- PPF interest-As Exempt Income disclosure
- Under construction property in ITR
- Scrutiny and reopening of past returns
- Booth for sales promotion
- Upload Level ValidationITR3Category of Defect B/D
- Building tax payment deduction in rental Income
- F & O PROFIT REPORTING FOR AY 2026-27
- Difference in GSTR3B system generated which is correct and actual Payment it asks
- Indian IT Portal issue in computing tax as per UK-India DTAA
- Capital Gains on sale of residential flat
- PF Taxable Income
- Clarification on Tax Audit Applicability and Reporting of F&O Transactions in ITR-3
- Interest credited in FY2025-2026 & TDS therein by EPFO does not reflect in AIS or Form 26AS
- 44ad eligble money lending interest
- Taxation in the hands of Landowner under JDA
- Delisted shares sold in off market/ Rebate u/s87A
- In Exports Sales HSN details where to fill
Trending Online Classes
-
DT & Audit (Exam Oriented Fastrack Batch) - For May 26 Exams and onwards Full English
CA Bhanwar Borana & CA Shubham Keswani
Subscribe to Pro
Join an elite circle of professionals
CAclubindia
