DEBTORS WRITTEN OFF

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ipcc
86 Points Joined March 2012
In balance sheet from 4 years debtors are out standing which amount not received in future what provision in income tax and how to written off
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On 05 March 2022 at 20:25 Report
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GST Practitioner & Accounts
15045 Points Joined March 2014
As far as Income tax act is concerned , deduction under Income tax is allowed under certain conditions .

pass entry

Bad Debts A/c Dr
To Trade Debtor's A/c Cr
( Bad debts written off )

Before write off , please discuss with your company CA or other professionals CA .
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On 05 March 2022 at 20:48
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CFO- at NHTF
58280 Points Joined August 2012
Enter the journey voucher as

Bad Debts A/c Dr

To Trade Receivables / Debtors

If it is huge amount then shift the part of the amount to upcoming financial year
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On 05 March 2022 at 21:38
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28118 Points Joined May 2017
Where is the entry of provision for doubtful debts?
In Income Tax only banks are allowed deduction for doubtful debts.
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On 06 March 2022 at 07:55
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CFO- at NHTF
58280 Points Joined August 2012
Bad debts written off allowed for all
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On 06 March 2022 at 08:05
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CFO
1347 Points Joined March 2020
Provision for Bad and Doubtful Debts

As per section 36(1)(viia) of the Income Tax Act, 1961 only banks and financial institutions are allowed deduction in respect of the provisions made for bad and doubtful debts. No other assessee is allowed to claim the 
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On 06 March 2022 at 08:06
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CFO- at NHTF
58280 Points Joined August 2012
Refer Circular 122016. When trade receivables are became bad then those are directly written off as bad debts ..

Only banking entities requires provisions, why others require provisioning like standard , substandard , doubtful / bad , loss assets ?


Refere 36(1)(vii) of income tax act read with section 36(2)
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On 06 March 2022 at 08:12
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28118 Points Joined May 2017
Only banks can avail deduction of provisioning others not.Provision of debtors in all cases is an important aspect to ascertain the true and fair position of debtors.
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On 06 March 2022 at 08:52
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CFO- at NHTF
58280 Points Joined August 2012
Bad Debts doesn't require provisions..If it's completely written off as bad then what is the need for provision ?

Burden of proof wi be on the assessee..They can prove it if there is assessment..
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On 06 March 2022 at 08:56
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28118 Points Joined May 2017
First place your query correctly.Its wrong. Bad debts are charged off to pl.
First know the process.
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On 07 March 2022 at 07:37
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Proprietor
523 Points Joined September 2010

Bad debts are allowed ,Only banking companies and subject to rural advance as per RBI Master circular, Bad debts more than Rs 1 lacs with PAN reporting in ITR is must

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On 07 March 2022 at 12:32


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