Regarding bad debtors.

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Vishal Panwar (Querist)

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)

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)

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)

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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