Accounting Entry & Tax Liabilities

This query is : Resolved

MANOJ CHOUDHARY (Querist)
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14 April 2009 Dear Expert

Please help regarding my queary about Debtors W/Off

last year(2007-08) my client tax liabilities as per audited balance sheet Rs. 3.00 Crore

but this year(2008-09)we observe in last year one of Debtors which amount approx 1.00 Crore which are likely Bed debts and not taken Bed & Doubtful debts provision and we want to take provision in this year

so please advise regarding how affect tax liabilities last year 3.00 crore and what entryies pass in account

Thanks

CA Nitin Wadhwani

CA Nitin Wadhwani (Expert)
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15 April 2009 Deduction of provision for bad debts is not allowable except in case of banking companies.
But deduction of bad debts is allowable as per sec.36(1)(vii).

CA Devanshi Gandhi (Ajani)

CA Devanshi Gandhi (Ajani) (Expert)
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21 April 2009 i support...
entry for bad debt is
P&L a/c dr
to debtor a/c
and entry for prov. for b.d is
prov for bad debt a/c dr
to debtor a/c
& P&L a/c dr
to proc for bad debt a/c

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