W/Off

This query is : Resolved

MANOJ CHOUDHARY (Querist)
Follow

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

Shyam Lal Naik

Shyam Lal Naik (Expert)
Follow

14 April 2009 It will not affect tax liability of FY 2007-09. It will neither affect tax liability of FY 2008-09.

Making a provision for bad and dobutful debt is not an allowable expense. To claim the expenditure, the amount must be written off as bad debt in contra distinction to mere provision.