W/o loan
This query is : Resolved
Querist : Anonymous
Querist :
Anonymous
(Querist)
30 April 2013
Our client, which is a private limited company had given unsecured loan to another private limited company, say company ABC Pvt Ltd. amounting to Rs 6 crores and was earning interest income on the same. Now there has been some dispute and ABC Pvt. Ltd. is neither paying interest nor is ready to return the loan amount to our client. Legal case is a remedy. But suppose, the loan is not refunded what entry should be done by our client in their books of accounts. Writing off loan is allowable expenditure or not ? Please guide.
30 April 2013
Loan is of capital nature hence any written off amount due to bad will not be allowed as deduction under Income tax.
For accounting
Debit - Loan Written off Account
Credit - Loan / person account.
If provision made before - then debit concerned provision account.
For accounting
Debit - Loan Written off Account
Credit - Loan / person account.
If provision made before - then debit concerned provision account.
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