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Wrting off interest on cash credit

This query is : Resolved 

29 July 2011 Dear Sir

If a cash credit a/c becomes NPA and there is interest accumulation in books for two consecutive years on it then in case of settlement with bank for a lumsum amount payment say Rs. 1 crore against 2 crore oustanding including interest of Rs. 50 lacs accrued for more than one financial year then what will be the treatment of interest which is partly or fully not paid after settlement of full & final payment with the bank for cc a/c

29 July 2011 You have said that the total amount of interest is Rs. 50 lacs.

on payment of lumpsum of Rs. 1 crore, the interest gets fully paid.

you will be writing back principal amount not paid.


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