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of <h1>Banks Can Deduct Interest Remissions on Loans to Troubled Entities as Trading Losses, Says Board After Legal Consultation.</h1> The Board has examined whether nationalized banks and public financial institutions can deduct voluntarily remitted interest on loans to financially troubled entities from their income. In a specific case, a public-funded undertaking faced financial difficulties and could not pay interest on loans. Under a financial rehabilitation scheme, banks and institutions agreed to write off part of the interest. The Board, after consulting with the Ministry of Law, concluded that such remissions, if made for commercial expediency to avoid larger losses, can be considered a trading loss and allowed as a deduction when computing total income. Each case should be assessed individually.
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