Regarding bad debtors.

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Vishal Panwar (Querist)
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08 December 2012 Dear Sir,

If any debtors not in condition to pay the receivable amount even we have written him many letters to pay.
After how much time I can claim this amount in P& L as a Bad Debtors and under which IT Section. please answer.

@VaibhavJ

@VaibhavJ (Expert)
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08 December 2012 Hi

Generally non receipt for more than 180 days is sufficient to w/off as bad debt.

However industry to industry standard may vary.

Its deductible u/s36(1)(vii)

Thanks//Vaibhav
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Vishal Panwar

Vishal Panwar (Querist)
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08 December 2012 Do you mean withing a Financial Year suppose I have billed to a party on 10-May-12 but after 10 day side he didn't pay and even passed Nov-12 can we assume this party as a bad debtors in P&L of 2013.

We are Distributor firm of mobile handset can we declare this in current F.Y. & if yes then time of Assessment will ITO ask documents or any supportive pertaining to declare this debtors as a Bad Dab. ???

@VaibhavJ

@VaibhavJ (Expert)
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08 December 2012 hi

10 days is very short period, however till nov 12 its more than 6 months due.

Since mobile HS loses its value in short time this perid is sufficient for w/off.

Recovery letters sent by Regd. Post can be served as proofs.

Thanks..

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