banner_ad

Income tax - 36(1)(vii)

Tax queries 383 views 2 replies

According to section - 36(1)(vii) - Bad debt will be allowed when :-

1- They should be written off in books.

2- They should be taken into account in computing the income of previous year in which ded. is claimed or in any earlier years.

Explanation to this sec. - For the purpose of this clause any bad debt (to be written off) should not include any provision for bad or doubtful debt.

Querry:- What is the benefit of creating provision for d/debts when they are not allowed as deduction. Income tax allows deduction only when entry is

:- Bad deb dr - to debtor (and not bad debt dr -to prov for doubtful debt). This way prov for doubtful debt will always remain idle with no use.

Replies (2)

Bad debts are the ones which will never be recovered either in the current audited financial year or years to come.  But there is every possiblity to reverse a doubtful debt when the circumstances develop positively. That may be the reason why ITD is not allowing any provision at all.

What if provisions are never going to be reversed and they result in actual loss?


CCI Pro

Leave a Reply

Your are not logged in . Please login to post replies

Click here to Login / Register  

Company
22 May 2026
U.S. Financial Reporting & Consolidation Manager

Karia Overseas

Ahmedabad

CA

View Details
Company
24 May 2026
Accounts & Tax Executive

PARAS KHURANA AND CO

New Delhi

B.Com

View Details
Company
ARTICLESHIP 28 May 2026
Accounts, Audit & Compliance Executive

Shyam Joshi & Associates

Pune

B.Com

View Details
Company
ARTICLESHIP 17 May 2026
CA Article /Trainee

Malik Sunil & co

New Delhi

CA Foundation

View Details
Company
ARTICLESHIP 08 June 2026
Internal & Taxation Article

O P Bagla & Co LLP

New Delhi

CA Inter

View Details
Company
26 May 2026
CA / MBA (Finance) / CMA / M.Com (Finance)

Sri Aurobindo Gnostic Centre of Education

New Delhi

CA

View Details
Company
29 May 2026
Finance Head

Bhawar Sales Corporation

Chennai

Graduate (Any)

View Details
Company
ARTICLESHIP 09 June 2026
Article Trainee

Numbertree LLP

Mumbai

CA Inter

View Details