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CA.kaya (Querist)
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02 October 2009 IN BANKS THEY DO PROVISION FOR NPA , PROVISION FOR PROBABLE NPA AND ALL. IN OTHER COMPANIES " PROVISION FOR BAD DEBT" IS DISALLOWED WHILE CALCULATING TOTAL INCOME. MY QUESTION IS WHETHER NPA s ALSO DISALLOWED IN CALCULATING TOTAL INCOME OF THE BANK. IS IT NOT OF THE SAME NATURE OF PROVISION FOR BAD DEBT

CA Satheesh

CA Satheesh (Expert)
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02 October 2009 Pls read Sec 36 (1)vii(a)
Along with 5/7.5 % of total income following will be allowed as deduction
scheduled bank or a non-scheduled bank referred to in this sub-clause shall, at its option, be allowed in any of the relevant assessment years, deduction in respect of any provision made by it for any assets classified by the Reserve Bank of India as doubtful assets or loss assets in accordance with the guidelines issued by it in this behalf, for an amount not exceeding five per cent of the amount of such assets shown in the books of account of the bank on the last day of the previous year:]

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