Dear Sir,
I am working in a Private Limited firm in the accounts department.
There are many debtors who are not paying. Is there any benefit (being a Private Limited firm) if we send them notice.
Thanking You,
Lucky Agarwal
4 Replies
(Guest)
Dear Lucky,
Yeah, off course you should send notice.
Benefits are many :
1. It shows that effort is made by company to recover the amount.
2. Even Promptness on part of company.
3. Its also a proof that its a genuine transaction i.e. not a book entry or dubious transaction.
4. When reasonable efforts are made to recover the amount, and even after that it is not recovered, such amount can be written off in the books.
Thanks.
Kind Regards,
Neha
CA Tushar Lakhanpal
(CA)
(416 Points)
Replied 09 December 2011
all in all..
you can claim deduction,under income tax, for such bad debts
1st You send them notices
2nd no further business transaction is initiated
CA yogesh jain
(job)
(53 Points)
Replied 10 December 2011
To claim a deduction of bad debt, it is required to prove that, a resonable effort for recovery of debt should be made. By sending notice u prove to department that a resonable effort for recovery of debt was made on your part.
CA Maulik Rachh
(-)
(114 Points)
Replied 14 December 2011
Under Income tax act,u will be benefited alot if u have sent the notices earlier..
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