Rule 6EB - Categories of bad or doubtful debts in the case of a public company under clause (b) of section 43D

Bad or doubtful debts classification for public companies determines interest income treatment under clause (b) of section 43D.

Clause (b) of section 43D applies to public companies when interest income arises from receivables falling into two categories: doubtful asset-a debt that has been a non performing asset for over two years, with specified triggers (six months past due for term loans, leases, bills or other short term credit); and loss asset-a debt identified as loss and considered uncollectible though not written off. An amount is deemed past due if unpaid for thirty days beyond the due date.