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Provision for doubtful/bad debt

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Querist : Anonymous

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Querist : Anonymous (Querist)
05 June 2012 05.06.2012
Dear Sir,
Our company is an exporter and local seller both.
One Indian debtor of our company do not paying payment. The outstanding amount is about 50 lacs. Can we made provision for doubtful or bad debt and charged it to P/L a/c? with how much percentage?

Pl. advice.
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CA Siddhartha Bhardwaj

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CA Siddhartha Bhardwaj (Expert)
06 June 2012 You can make provision for doubtful debt. However the same is NOT allowed as deduction for Income Tax.

Under the Income Tax Act, ACTUAL bad debt is allowed as deduction.
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Ca Anand Dubey

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Ca Anand Dubey (Expert)
06 June 2012 Yes you can make provision .The income tax will only allow it when you write off the debtor
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