An individual has defaulted in repaying Bank Loan. Later one time payment is settled and the barrower was asked to pay only let us say 2 crore as against outstanding demand of ₹ 3.5 crores.
Whether the sum of ₹ 1.5 crores waived by the Bank will be treated as his income U/s 56(2)(X)
Bank Loan Waiver of 1.5 Crores Taxable as Business Income, Not Under Section 56(2)(X) of Income Tax Act. An individual defaulted on a bank loan but later settled the debt with a one-time payment of 2 crore against an outstanding demand of 3.5 crores. The query raised was whether the 1.5 crore waived by the bank should be treated as income under Section 56(2)(X) of the Income Tax Act. The response clarified that since the liability of 1.5 crores is written off and credited in the Profit & Loss account, it would be taxable as business income, making the question of taxability under Section 56(2)(X) irrelevant. (AI Summary)
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