Ours is Sole Proprietor firm dealing in ISO consultancy services with turnover upto 10 lakhs for the last 7 years.
Some of our Clients not paid us for the last 3 to 5 years and invoices submitted still the amount is not paid. Some of clients closed the organisations.
Can we show the not received amount (sundry debtors of 3 years back) from the clients as LOSS and show in IT Returns under expenses?
Please advice
8 Replies
CA CS NITIN MAHAJAN
(CA )
(273 Points)
Replied 27 April 2018
Yes, you can claim the irrecoverable amounts as bad debts in ITR
Aamir Ansari
(Student)
(101 Points)
Replied 27 April 2018
if debtors are showing in balance sheet and the amount is irrecoverable, deduction for bad-debts can be claimed in income tax u/s 36(1)(vii).
Mohammad Rafiuzama
(83 Points)
Replied 27 April 2018
Sir, my turnover is below 10 lakhs. I am not maintaining books of accounts.
vinodkumargupta
(proprietor)
(115 Points)
Replied 28 April 2018
you can debit irrecoverable amount of your client pending since long in your books of account . it is a allowable expenditure u/s 36 of income tax act.
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