HI FRIENDS
PLEASE HELP
WHETHER AN INDIVIDUAL CAN CLAIM BAD DEBT DEDUCTION IF THEY REPRESENTS LOANS .
BUSINESS DEBTORS ARE ELIGIBLE FOR DEDUCTION .
WHAT ABOUT CASH ADVANCES WHICH USUALLY PERSON MAKE TO EARN INTEREST.
THANKS
REENA JAIN
HI FRIENDS
PLEASE HELP
WHETHER AN INDIVIDUAL CAN CLAIM BAD DEBT DEDUCTION IF THEY REPRESENTS LOANS .
BUSINESS DEBTORS ARE ELIGIBLE FOR DEDUCTION .
WHAT ABOUT CASH ADVANCES WHICH USUALLY PERSON MAKE TO EARN INTEREST.
THANKS
REENA JAIN
dear reena
ur asking about bed debts of CASH ADVANCES WHICH USUALLY PERSON MAKE TO EARN INTEREST.
so if a person carries on business of giving loan then he can surely claim deduction of bed debts of such loans but in rest of the cases a person can not claim such deduction becouse in such cases giving loans are not an activity connected with business . he can claim only bed debts of amount releted to money owing from debtores and advances made to suppliers or employees.
hence to ur queaction prop.can not clam bed debts of such loans
In my view., yu cant claim since it is not of revenue in nature.., lets wait for others view..
dear reena .
You cannt claim the deductions of loan since sec. 36(1)(vii) covers bad debts which arise in
ordinary course of business from business activity .,
cash advances are not part of bus. activity , they are given to earn other income which is taxable
under the head "income from other sources" .
since ur QS is related to the loans which are not
in nature of bus. activity . so u cannt claim it. it is a capital loss which has no treatment.
if ur bus. was of money lending then it 's possible to claim otherwise not.
for any further query u may email me.
I think we can claim it as expense as we would have been treating intt. generated as income
so if advance gone bad then it should be allowed.
And by the way there is no such notification( as per my knowledge) about disallowance this as expense
so we can claim it as expense.
hi dear
for an individual may not claim the deduction for bad debts
only banks can only claim deduction
NO WAY
nope..........
No the bad debts arising on account of giving loans for the purpose of earning interest is not a allowable expenditure because the amount of loan which is been given is not condsidered as your business income
Dear Reena
Sec. 36(1)(vii) deal with claim of Bad Debts . The following conditions must satisfy.
1. There must be a debt.
2. Debt must be incidental to the business or profession of the assessee.
3. Debt must have been taken in to account in computing assessable income .
4. Debt must have been written off in the books of accounts of the assessee.
In ur. case I feel if U offered interest income from the buseness of money lending than U can claim as bad debts easily, otherwise U hav to prove before officer that loans & advances are part of business.
Hi Reena,
You cann't claim the same as bad debts, it is a capital loss having no tax treatment.
Mr.Arjith singhal, the onus of proof to prove that it is admissible deduction falls on the part of the assessee,then how can you prove hence it is not deductible
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