06 August 2008
hi, What is the treatment to be done where there is an outstanding debit balance of a ledger which is in the nature of Advance given to a person and which is due from a long time. What is the entry to be passed to remove that debit balance and what would be its impact on Profits of the company. and which sections of IT Act would be applicable. Plzz clarify.
06 August 2008
If it is not recoverable, treat it as a bad debt. But whether it will be allowed are not in income tax return depends upon whether it is an advance for capex or revenue expenditure.
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