Sundry creditors written off
This query is : Resolved
Quick Summary
28 December 2011
Dear sir,
How will affect the sundry creditors written off to the total tax liability?
IF I HAVE TO WRITE OFF RS.800000/- THEN HOW CAN I DO THAT
How will affect the sundry creditors written off to the total tax liability?
IF I HAVE TO WRITE OFF RS.800000/- THEN HOW CAN I DO THAT
28 December 2011
Sundry creditors written off results in income.
If sundry creditors are in respect of expenditure, i.e., purchases, such a treatement shall result in business income and shall be taxable in the hands of the assessee under Section 41(1) of the Income Tax Act.
If however, advance received from a party is written off, then the same is not taxable.
If sundry creditors are in respect of expenditure, i.e., purchases, such a treatement shall result in business income and shall be taxable in the hands of the assessee under Section 41(1) of the Income Tax Act.
If however, advance received from a party is written off, then the same is not taxable.
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28 December 2011
IF I HAVE TO WRITE OFF RS 800000/-(SUNDRY CREDITORS)HOW CAN I DO THAT?
28 December 2011
sundry bal w/off debit 800000
sundry creditor credit 800000
sundry creditor credit 800000
28 December 2011
Dear CA Pramod Jain, the entry that you have suggested is incorrect.
Sundry creditors is already a credit balance. It will be debited for writing off the balance.
The correct entry will be as under:
Sundry Creditors A/c Dr. Rs. 8,00,000
To Balance Written Off Rs. 8,00,000
Balance written off will be treated as income and will be credited to Profit & Loss A/c.
Sundry creditors is already a credit balance. It will be debited for writing off the balance.
The correct entry will be as under:
Sundry Creditors A/c Dr. Rs. 8,00,000
To Balance Written Off Rs. 8,00,000
Balance written off will be treated as income and will be credited to Profit & Loss A/c.
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29 December 2011
yes my mistake mr.siddartha is right.
02 June 2014
If such a huge amount is written off it will be suspect able.It might be happen when the company make payment with black money the balance of the creditors remains stable thats why the company had to write off such a huge amount.How will the income tax authority think about this writing off?
10 July 2014
You are declaring the same as income. There should not be any problem.
25 September 2020
What about the GST libility on Written off income.
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