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Unsecured loan writtenoff

I am sorry mate but have you tried to check other company's options for loans? I am guiding myself by an article I found https://credit-10.com/za/, I have to say that this is very helpful, at least for me, because using those articles help me to avoid a big problem with my company. I was on the way to lose a lot of money because of a client that didn't pay for our services. I made the soft he needed and showed him a demo version of it, sent him the code and he left. I got only 25% of the total sum he had to give to me. This is the reason why I took the loan and guided myself in that article.

 8 Replies

prasad Nilugal

prasad Nilugal   18 August 2018

you can pass following entry in the books of accounts to write of loan .

Unsecured loan A/c Dr

To Unsecured loan written off A/c Cr

( being loan written off)

show unsecured loan under indirect income in profit & loss a/c

RAJA P M ("Do the Right Thing...!!!")     18 August 2018

I agreed with Mr Prasad Nilugal's View...

Better to consider Your Company Statuory Auditor
rama krishnan

rama krishnan   18 August 2018

but the waived off loan should be declared as your income for the concerned a.y

JAI BHOLA   18 August 2018

As per "the limitation act " if your debt/advance received is not claimed,within 3 years, by the debtor/lender , the same shall be included in the income for the concerned A.Y...... similarly, the waived of loan or as in your case , the amount of loan + the outstanding interest payable shall be taken to the credit of Profit and loss account .
2 Like
Radhe Shyam

Radhe Shyam (Article)     18 August 2018

Thanks to all for ur valuable reply

rajesh (manager - finance)     20 August 2018

GST / Service Tax applicable on Written Off ?

Suresh Thiyagarajan

Suresh Thiyagarajan (Student)     14 October 2019

1. Loan waived off will not be taxable as a business perquisite as per the case law Rollatainers Ltd where SC has given a decision in favor of the assessee, that it will neither be taxed if the same is obtained for the purpose of acquiring a capital asset or for the purpose of business or profession. 
2. Hence, unsecured loan waived off will not be treated as business receipt taxable in the hands of the company unlike remission or cessation of trading liability. 
Please correct me if the above solution has an alternative view

Charlie Williams

Charlie Williams (Financial Advisor)     29 April 2021

If you study and delve into how to get a loan, and also online money borrowing will not be a problem for you at all.

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