Unsecured loan writtenoff

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

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


Better to consider Your Company Statuory Auditor

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

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 .

Thanks to all for ur valuable reply

GST / Service Tax applicable on Written Off ?

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