Debtors not paying

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

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

 

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.

Under Income tax act,u will be benefited alot if u have sent the notices earlier..